Cautious, smarter spending, buying inexpensive, non-essential items, ‘trading down’ and home entertaining will dominate consumer buying habits in the coming months, according to the inaugural Deloitte Consumer Review, published today.

The quarterly survey found more than a third of consumers (36%) spent less on clothing and footwear in August, September and October, while 18% spent more.

And in the next three months – November, December and January - 31% of consumers intend to spend less on clothing and footwear. Just 9% intend to spend more.

Declining consumer spending has been a result of a number of factors, according to the survey, including limiting impulse purchases (cited by 17% of consumers) and having already bought the item and not needing another one (cited by 9%).

Other reasons cited for a decline in spend include having bought the item second hand (4%); having used discount vouchers (4%) and having traded down by buying less expensive brands (9%).

One in five households has seen a reduction in income in the last quarter, while 7% have seen someone lose their job, the survey found. Consumers are also spending more on utilities, transport and groceries as the cost of these continue to rise, while cutback on entertainment, clothing and travel are being made.  

Concern over the Euro, high levels of inflation and flat consumer incomes are all adding to weakening consumer sentiment. A sharp fall in inflation in the first half of next year, predicted by The Bank of England, will help support household incomes and spending to some degree.

However, pessimism is prevailing with 53% of consumers negative about the prospects for their disposable income, 28% about their personal debt levels and 23% on job security.