Consumers are treating themselves to meals out and preferring experiences over material things, despite flat levels of consumer confidence.
Deloitte’s Consumer Tracker found confidence is flat in the second quarter of the year, and down by four percentage points, compared to the same period last year.
The analysis revealed a North-South divide, with confidence up three percentage points in the North of England, but down two points in London and the South-East, mirroring a divergence in house prices between the regions.
Consumers’ confidence over their household disposable income and levels of debt declined by five and four percentage points, respectively, year-on-year.
Deloitte said despite strong earnings and jobs data, consumers are wary of elevated economic uncertainty and potential risks to UK growth.
Discretionary spending has seen marginal pick up this quarter, up one percentage point (to -5%).
Ben Perkins, head of consumer research, commented: “As we’ve headed into the summer months… a rising number of consumers are opting to spend in the leisure sector, treating themselves to holidays and meals out, for example, and there is a growing preference for experiences over material things. For some consumers, this change is part driven by their desire to share experiences with friends, family and followers on social media platforms.
“Whilst the end of this quarter saw an uplift in retail sales, a slowdown in both borrowing and saving points to growing caution which could impact spending in the coming months. The question remains how long consumers will be willing – or, indeed, able – to keep spending.”