Consumer sentiment is improving, with fewer people saying they plan to eat out less than in Autumn 2022.
Over the next three months, 38% of people said they planned to eat out less, down from 41% in September 2022, according to PwC’s Consumer Sentiment Survey - Spring 2023.
However, eating out and going currently remain at the bottom of the list for consumers as they prioritise where they are spending.
The findings are in line with a wider recovery of consumer sentiment, despite global economic uncertainty and continued inflationary pressures.
In October 2022, PwC found food and fuel shortages, rising inflation and the war in Ukraine contributed to consumer sentiment dropping to an almost historic low of -44%. Since then, consumer sentiment has climbed to -25% – albeit still in negative territory.
Despite wider economic challenges and worries continuing, consumers are looking to cut back less, with only one in ten saying they are struggling, down from 13% in Autumn 2022.
Inflation is still the biggest factor affecting spending, impacting four in five, but as it tapers away throughout the year, consumers are optimistic the situation is improving.
There is still a significant polarisation between age and socio-economic groups, with sentiment improving fastest among under 25s and over 65s, while 25-34 year olds and the poorest socio-economic group have seen a decline.
The sentiment of under 25s has increased by 13 points (to +15%), making them the most positive age group.
The sentiment of over 65s has increased by 14 points, seemingly more sheltered from the cost-of-living crisis than others.
The results are largely driven by more younger people living with the parents, and having more disposable income and a desire to spend, and older people having savings, lower or no mortgage repayments and the pensions triple lock.
While 25-34 year olds have seen a decline in confidence, they remain net positive (+2%).
Inflation is the biggest factor affecting consumer spending intentions. Across all age groups, four in five consumers say the higher cost of everyday products is a key factor in their spending.
Those inflationary pressures are also starting to diverge. Food price inflation continues to climb in the short term, impacting grocery, restaurant and cafe prices.
Food price inflation is expected to slow later this year, but eating out and going currently remain at the bottom of the list for consumers as they prioritise where they are spending.
As the country starts to move into better weather, PwC expects these will begin to pick up, particularly for the younger age groups.
PwC these categories traditionally tend to come out more negative in its survey findings than in reality.
The spending intentions of younger consumers are now the most resilient, particularly on fashion and going out, which shows a slight recovery across that age range as under 25s look to protect going out and fashion.
