42 per cent of household expenditure goes on essential items

Emergency essential expenditure: to cover these costs, a ‘typical’ household spends almost 42 per cent of its total consumer spending budget – a whopping 9,693 euros. Since 1995, the proportion of the budget spent on essential expenses has risen by 4.7 per cent, and the trend is set to worsen by 2026 due to rising energy costs. Essential expenses are those linked to goods and services that households cannot do without, such as rent and other housing costs, energy, utility bills, healthcare, transport and insurance. Housing is by far the most costly item, with €5,335 spent per person per year – €75 more, or a 1.4 per cent increase, compared with 2025. This is followed by insurance and fuel (€2,310) and energy (€1,829). Over the long term, energy expenditure has shown a steady decline due to the drive for efficiency in light bulbs, small and large household appliances and cars that consume less, with a reduction in consumption over the thirty-year period quantified at €1,231: bringing expenditure on energy, gas and fuels to €1,829. These are the key findings of the analysis carried out by Confcommercio’s Research Department on the compulsory expenditure of Italian households over the period 1995–2026.

“Despite a slowdown in essential expenditure, the burden on household budgets remains high, particularly for fuel and utility bills due to rising energy prices. Action is needed on taxation and tariffs to eliminate the distortions that are driving up fixed costs,” said Carlo Sangalli, president of Confcommercio, commenting on the figures.

Over this period, the greater share of compulsory expenditure in household budgets has been driven primarily by the differing price trends, with prices rising much more rapidly than those of tradable goods and services: from 1995 to the present day, their index has risen by 140 per cent, almost two and a half times that of tradable goods (+57 per cent) and one and a half times that of services (+88.4 per cent), with the highest increase seen in the ‘energy, gas and fuels’ category, where prices have risen by 211 per cent over thirty years. Analysis by retailers highlights how households have shown significant resilience, seeking to maintain consumption levels, by adjusting the mix of their spending, primarily curbing expenditure on more traditional goods rather than cutting it drastically, despite a gradual rise in inelastic costs that has reduced the scope for discretionary spending.

Since the end of last year, there has also been a recovery in demand for certain segments of durable goods, resulting in a stabilisation in the distribution of consumption between essential and discretionary items. For this year, the share allocated to the purchase of discretionary goods and services is estimated to remain stable at 58.3 per cent. During the period under review, the share of expenditure classified as essential rose from 37.0 per cent to 41.7 per cent, thereby limiting the proportion allocated to the purchase of goods and services that are a matter of consumers’ free choice and are linked to citizens’ preferences and lifestyles. Some items have seen an increase in spending, such as smartphones, computers and internet access, which have become indispensable – and therefore essential – for accessing banking services and dealing with public authorities. According to estimates by the Confcommercio Research Department, this year households are continuing the trend of seeking to recoup expenditure primarily on tradable services, which – following the setback in 2020 and the significant recoveries in subsequent years – have not yet returned to the 21.3 per cent share reached in 2019. By contrast, marketable goods as a whole are expected to see a further reduction in their share this year, settling at 37.5 per cent. An analysis of volumes and prices shows that the increase in the percentage share of compulsory expenditure is linked to rises in consumer prices. There is also the decline in population, which between 2014 and 2026 has seen a fall of around 1.5 million people, in addition to the progressive ageing of the population. There has been no growth in the volume of goods purchased per capita for almost 20 years: it is only around 2025–2026 that spending will return to a level similar to that of 2007. As regards marketable goods, this year should see a recovery in some of those durable goods whose purchase has been postponed for a long time in recent years.

The situation remains difficult for food products, with volumes continuing to fall gradually. People are eating more meals away from home, and the ageing population is having an impact. The Confcommercio Research Department estimates that, for marketable services, there will be a 1.9 per cent increase in the volume purchased, amounting to 98 euros per resident.