The survey, conducted by EY and encompassing insights from 1,000 UK consumers found that despite economic uncertainties, nearly half (45%) of UK shoppers are gearing up for Black Friday shopping this year.

Rising living costs, especially concerns about energy, water and heating expenses, are influencing consumer attitudes, with 87% expressing apprehension about these costs.

The index highlighted that younger consumers, particularly millennials (26–41-year-olds), are exhibiting a more pronounced cut back on spending, with 40% planning to scale down expenses, compared to 27% of shoppers aged 58 and above.

Silvia Rindone, EY’s UK&I retail lead, commented: “With inflation, high rents and increased mortgages impacting younger age groups, these shoppers are being more cautious with spending. Retailers and brands will need to consider carefully how to win these consumers over.”

Financial pressures are notably acute among younger shoppers, as 59% are worried about rising interest rates, in stark contrast to 25% of their older counterparts (aged 42 and older).

The survey indicates a general trend of reduced discretionary spending, with more than half of UK consumers (51%) planning to spend less on significant purchases.

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Additionally, 43% of consumers are cutting back on clothing and footwear and 42% are trimming their expenditure on alcohol.

However, amidst these cutbacks, 18% of shoppers are allocating a budget for small treats, indicating a focus on luxuries and small indulgences.

Rindone continued: “Shoppers are becoming savvier of when to buy, maximising spend during sales events such as Black Friday and Cyber Monday.

“With the ‘golden shopping quarter’ becoming more polarised around these events, brands and retailers need to carefully plan their promotions this year in order to capture the consumer – too early and shoppers will delay in anticipation of further discounts; too late and the moment will be lost.”

Despite a return to physical stores, the survey notes the increasing shift towards online deal hunting for the festive season.

64% of consumers plan to conduct their research online, compared to a mere 6% planning to explore in-store options.

The survey reported that this online trend is particularly driven by “deal-savvy younger consumers”, with 28% of millennials planning to increase their online orders, up from 16% last year.

“While we’re not likely to see a return of the acceleration of growth in online that we witnessed during the pandemic, it remains a key channel for consumers,” added Rindone.

“Getting omnichannel offers right – like click and collect, or in-store returns will be a key driver for retailers having a successful festive season this year.”

The BRC-KPMG Retail Sales Monitor (RSM) reported in November, that during October 2023, UK retail sales witnessed a moderate increase of 2.5%, compared to the growth of 1.6% in October 2022, tempered by inflation and cautious consumer spending habits.