The latest KPMG report on UK Consumer Pulse Snapshot for Q4 2024 has been released. And offers valuable insights into financial security, spending behaviours, and future consumer intentions for 2025. The data within the report reveals evolving trends in retail, travel, and discretionary spending, alongside a nuanced picture of consumer financial confidence.
Table of Contents
Spending Trends: Growth in Online Marketplaces, Tech, and Experiences
The majority of UK households are heading into 2025 feeling financially secure. The report offers a clear snapshot of evolving consumer spending habits, from online shopping to travel, and how everyday financial confidence is playing out amid uncertain economic conditions.
Despite economic uncertainties, consumer spending has seen a noticeable increase in specific categories. The biggest growth areas include online marketplaces such as Vinted and Temu, with an increased surge of 20% driven by affordability and a preference for pre-owned goods. Many plan to spend in other sectors too, notably travel and in particular consumers are looking more at cruises for their holiday of choice.
Financial Security & Current Financial Situations
Most consumers feel secure about their finances, with nearly 60% expressing confidence. Many are able to spend freely on daily purchases, while a sizable number plan larger buys carefully. A smaller group, however, still faces tight budgets and must prioritise essentials over extras.
Consumer financial situations fall into distinct categories:
39% of consumers in 2025 feel comfortable and spend freely but take time to plan larger purchases. Although this is not the case for all, there are a numerous consumers who are affected heavily by the rising costs and limit spending to only ‘essentials’ and some who struggle to pay bills and rely on loans to keep up with payments. Notably, Q4 spending was supplemented by credit use, but many consumers prioritised saving over excessive spending.
Evolving Consumer Behaviours: The Rise of Value-Conscious Shopping
In response to financial considerations, consumers are adjusting their shopping habits, more consumers are purchasing promotional items to make their purchase more affordable. Q4 marked a noticeable increase of consumers who are making greater use of retailers loyalty schemes with a highlight for rewarding loyal customers with offers and special promotions Bia loyalty schemes. Retailers have also highlighted increased spending on own-brand and value items as consumers are more conscious of price for everyday items.
A large proportion of 18-24-year-olds bought more pre-owned goods, highlighting an ongoing shift towards sustainable and budget-friendly fashion choices for 2025.
Top Purchasing Drivers & Spending Triggers for 2025
The key Purchasing Drivers for 2025 are shows that remains the most significant factor, especially for consumers aged 45-64. However, it is less of a concern for 25-34-year-olds. The second driver is quality, which remains a primary driver across all demographics. And finally, convenience is increasingly valued by 25-34-year-olds.
Triggers for Increased Spending:
A wage rise would be the most likely reason to increase an individual’s spending beyond 2024’s levels. A third of customers would be more influenced by promotional events and a quarter of consumers have said they would be more likely to spend if retailers improved their loyalty schemes and gave better rewards.
Planned Big-Ticket Purchases for 2025
Consumers are planning larger purchases, particularly in travel and home improvements, consumers are intending to spend on holidays this year, as a big purchase, intending to save and plan for in advance for this cost. Consumers are also budgeting and planning for minor home improvements, with less preparation or budget for major home improvements this year.
New Year’s Resolutions & Financial Goals for 2025
Despite mixed views on the broader economic outlook, many consumers are gearing up for big-ticket purchases next year. Travel plans remain a top priority, while home improvements are also on the agenda. With a potential boost from better wages and enticing retailer promotions, there’s cautious optimism that spending will keep pace.
What This Means for Retailers in 2025
For businesses, the message is clear, in an environment where consumers are budget-conscious yet willing to invest in key experiences. Offering attractive promotions, robust loyalty programs, and seamless shopping experiences is more important than ever. Retailers that strike the right balance between affordability, quality, convenience and embrace sustainability, will be best positioned to succeed in 2025.
Read the full KPMG report here for more consumer snapshots and insights on spending behaviour for 2025. For more information on this story, or for support with your digital marketing. Get in touch with our team of digital specialists send us an email to team@modo25.com
