Financial firm PricewaterhouseCoopers (PwC) has published its Consumer Sentiment Survey for Spring 2026, which looks at how retailers can respond to consumer concern over costs.

PwC found that sentiment among UK consumers had tumbled to its lowest level since September 2023, dropping from -1 to -13. This was the sharpest quarterly decline in sentiment since the onset of the Ukraine war four years ago. PwC said the decline reverses the “cautious improvements” in consumer sentiment seen over the last year, returning sentiment to its longer-term average of around -10 to -15.

According to the financial firm, all age groups expressed concern, and the speed of the decline in sentiment across the board signals sentiment is “likely to weaken further” as the full impact of higher food and energy costs is realised.

Nine of out ten consumers named the “cost of living” as their biggest concern. PwC research found that for almost three quarters of consumers these concerns will have a direct impact on their spending or saving plans for the year ahead.

PwC said that people planned to rein in short-term spending across every category, with notable increases in the number of consumers prioritising trading down to cheaper brands and going to cheaper stores compared with three months ago. Longer term, spending intentions over the next year reportedly dropped across every category, and older consumers were reported to be less willing to cut back on groceries.

Consumers predicted that the grocery category would remain the top spending priority, while almost every other category saw a drop in spending priority. The eating out category had the largest decline in expected spending.

Looking forward

PwC said that rising food prices “typically have the biggest influence” on cost of living perceptions, and are expected to climb further. It warned that consumers would curb their spending further, demonstrating plans to cut back or trade down as prices rise.

The firm said businesses should “look carefully and quickly” at shifting consumer behaviour and act to protect key trading seasons ahead. It said that acknowledging that customers are under strain will help retain them in the coming months and protect businesses for tougher times ahead.

PwC recommended that retailers and grocers look to appeal to loyal shoppers who are cutting back or trading down, to discourage them from switching retailers. It highlighted a need to offer ranges at different price points to help shoppers economise, while retaining premium own label ranges to allow shoppers affordable treats.

Zelf Hussain, business recovery partner at PwC UK, commented: “With retail and consumer businesses more exposed to the current market conditions, now is the time for owners to look at whether transactions, either merger or divesting, or restructuring will put their organisations on a surer financial footing.

“Company insolvencies in the first quarter 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.”