PwC survey: consumer sentiment suffers major quarterly fall as beleaguered Brits brace for rising costs

Global events have dented consumer confidence, with sentiment declining to its lowest level since autumn 2023 and falling at the fastest quarterly rate since June 2022, according to PwC research.

Its survey, a barometer of consumer’s spending intentions, recorded an index score of -13 in April, falling from a score of -1 at the start of this year and reversing the improving trend seen since the start of last year. 

Now the score sits in line with the long run average since PwC began tracking sentiment in 2008. Although sentiment is trending downwards across all age groups, young people are still more optimistic than older people and the gap remains wide. The findings come as the full supply chain impacts of the Middle East conflict, for example on energy prices and food, are yet to be felt by consumers.

With people bracing themselves for rising living costs, the survey reveals the biggest quarterly drop in perceived household finances since 2022 - a 7% decline in those reporting healthy finances (i.e. having money left at the end of the month for luxuries or savings) since January, and a 4% rise in those struggling or in trouble (i.e. missing bills or loan repayments, or in danger of doing so). Under 35s have been hardest hit, with a 20% fall in those feeling financially healthy and a 9% increase in those struggling or in trouble.  

Almost 90% of consumers say they are concerned about the cost of living, the top concern for consumers, particularly middle age groups (35-54 year olds) and the less affluent. The other joint top concern is the UK economy (almost 90%), followed by global events (87%), with other big rises this quarter for concern about household earnings (up to 63% from 58%) and mortgage repayments or rent going up (up to 44% from 36%). 

Concerns over the cost of living has led more consumers to curb spending in the short-term. Almost eight out of ten consumers plan to make spending cutbacks in the next three months. When asked what they expect to cut back on the most, two-fifths said they will simply buy less, with a similar number saying they will eat out less or trade down to cheaper brands (37%). Not surprisingly given the higher price of petrol and diesel, the category that’s seen the biggest rise since January is the number of people who say they will drive less, which has doubled from 12% to 24%. 

Sam Waller, Leader of Industry for Consumer Markets at PwC UK, says: “Rising costs are prompting shoppers to pull back spend across the board, and it’s expected sentiment will get worse before it gets better, as consumers face higher energy and food costs later in the year. For businesses, this environment demands agility and resilience. With customers increasingly cost-conscious, responding to their changing needs, optimising supply chains, strengthening logistics, and building flexibility into operations to manage demand volatility and rising input costs will be key to navigating the uncertain months ahead.” 

When consumers were asked what their spending priorities are for the next 12 months, grocery shopping remains the top category, driven by expected inflation, with pet food and pet care being the only other area where more consumers plan to increase rather than decrease spending. 

More people say they plan to spend less than spend more on every other category, with the biggest net difference in spending intention earmarked for eating out (-32%) which is also 9% worse than it stood in January (-23%). However, net spending intention has declined across every category since the start of 2026, now falling to levels we last saw two years ago. 

While more consumers in all age groups intend to spend less rather than spend more on every category except on food and pets, young people, those ages 18 to 34, are less willing to cut back on clothing and health and wellbeing, with positive net spending intention on those categories. 

Jacqueline Windsor, Head of Retail at PwC UK, says: “The fall in consumer sentiment this quarter will give retailers pause for thought. While the first quarter and first half of the year tend to be the low season for many, the prospect of a Golden Quarter with higher inflation will feel like the eye of the storm. Retailers will need to continue to position on value - ensuring they have a range of products for those who plan to trade down as well as cater for those who are going to protect their spending in areas like fashion, health and beauty.”   

Rick Jones, Hospitality and Leisure sector lead at PwC UK, says: “This change in sentiment clearly suggests discretionary spending is set to be reined in by consumers in the short-term. While most of the downward swing in spending intentions is directed at retail moments, eating out and hospitality, travel and leisure companies also need to act now."

“For high street hospitality operators, this will mean continuing to focus on providing great experiences and communicating value for money offerings to drive footfall. Also, pubs, bars and other leisure and hospitality businesses will be hoping the World Cup this summer can provide a timely boost to trade. For holiday operators, offering consumers flexible terms and alternative options could help remove barriers to early bookings.” 

Zelf Hussain, Restructuring and Insolvency partner at PwC UK, comments: “With retail and consumer business more exposed to the current market conditions, now will be the time for owners to look at whether transactions, either merger or divesting, or restructuring will put their organisations on surer financial footing. Company insolvencies in the first quarter of this year have already seen an increase month to month and with consumers cutting back combined with the rising cost of fuel and inventory, we may see this trend continue upwards unless businesses take action.”

2026 RTIH Innovation Awards

UK retail will be a key focus area at the 2026 RTIH Innovation Awards.

The awards are now open for entries and celebrate global retail technology innovation in a fast moving omnichannel world.

Our winners will be revealed at the 2026 RTIH Innovation Awards Ceremony, taking place at The HAC in Central London on Wednesday, 4th November.

Check out our 2025 winners here.

Our 2025 hall of fame entrants were revealed during a sold out event which took place at The HAC on 16th October and consisted of a drinks reception, three course meal, and awards ceremony presided over by award winning comedian, actress and writer Tiff Stevenson.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “This is the awards’ fifth year as a physical event. We started off with just 30 people at the South Place Hotel not far from here, then moved to London Bridge Hotel, then The Barbican, and last year RIBA’s HQ in the West End.”

“But I’m conscious of the fact that, to quote the legend that is Taylor Swift, You’re only as hot as your last hit, baby. So, this year we’ve moved to our biggest venue yet, and also pulled in our largest number of entries to date and broken attendance records.”

He added: “This year’s submissions have without doubt been our best yet. To quote one of the judges: The examples of innovative developments across both traditional and digital retail spaces were truly remarkable.”

Congratulations to our winners, and a big thank you to our sponsors, judging panel, the legend that is Tiff Stevenson, and all those who attended our 2025 gathering.