Over a third (37%) of low and middle-income consumers are now only buying essential items, the survey found, an increase of 11% compared to February, while 32% have switched to cheaper brands to try and save money.
Almost half say they now feel financially worse off, while only 39% say they feel in control of their lives.
Higher income earners were more upbeat about their spending habits despite inflationary pressure, with 61% saying they are excited to spend money on things that will improve their lifestyle.
EY UK&I Retail Lead Silvia Rindone said: “Our research reveals that instead of consumer behaviour staying relatively consistent, we are seeing consumers drifting towards two extremes. At one end are cash-strapped consumers who are watching every penny, at the other are those who are willing to spend and want retailers and brands to excite and entice them to do so.
“Navigating this K-shaped profile in consumer behaviour is key to surviving and thriving in the new economic landscape.”