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