George Osborne has been urged to put money in people's pockets as research found a £3,000-plus a year slump in household spending had left a £220 billion black hole in the economy.
Consumer group Which? said failing to use the Budget to deal with such a "squeeze" would jeopardise hopes of securing a return to growth amid fears of a triple-dip recession.
It warned that the UK had never in the past been able to emerge from recession without a rise in spending, making action "critical" in the Chancellor's package on Wednesday.
Analysis of official data found households had spent on average £3,150 less a year since the start of the credit crunch - £1,750 of that on "non-essential" goods and services, it said.
If spending rates at the end of 2007 had been kept up, £220 billion more would have been spent by now in real terms at 2009 prices - £136 billion of that on "non-essential" items.
Which? executive director Richard Lloyd said: "The squeeze on incomes and collapse in consumer confidence has led households to slash their spending during the financial crisis, with a devastating impact on the wider economy.
"The longer the squeeze goes on, the longer this spending setback will continue. The UK has never before come out of recession without an increase in consumer spending, so it is critical that the Chancellor puts consumers at the heart of his plans for a return to growth."
The analysis was commissioned from the Centre for Economics and Business Research (CEBR).
Spending on eating out had fallen £13 billion a year and the restaurant and catering industry had reduced output by 10% and shed 90,000 jobs, Which? pointed out.
Its own surveys had also found that more than two million households had defaulted on a housing or bill payment in the last two months. More than a third of households - nine million - were now cutting back on essential spending
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