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British Lifestyles: Growing Tired of Austerity - UK - April 2016

Published By :

Mintel

Published Date : Apr 2016

Category :

Lifestyle

No. of Pages : N/A

Britain’s economy growth has outstripped other major economies, employment is high (and unemployment is low) and wages have been rising above inflation. Yet, consumer sentiment has been slow to respond. Perhaps we will need to see a more sustained period of growth in earnings before Britons start feeling truly optimistic.

Whilst there has not been a big improvement in overall consumer confidence, better-off Britons are clearly pulling away from the rest; higher income earners feel more confident about their finances and show more willingness to spend across more indulgent categories, such as leisure, holidays and foodservice.

Table of Content

Overview

What you need to know

Executive Summary

People are still cutting back, but less actively
Figure 1: Changes in spending habits in 2015, January 2016
Time to stop relying on promotions
Figure 2: Reasons why people spent less across all categories in 2015 (netted across all sectors), January 2016
Austerity fatigue is setting in
Figure 3: What people buy themselves as a treat, January 2016
The better off buck the savvy shopping trend
Figure 4: Attitudes towards spending, by household income, January 2016
What we think

Britain Today – What You Need to Know

Economic growth slows
Low inflation helping British households
Growth in insecure jobs
The better off are feeling the benefits of the recovery
Britain’s population continues to age
The baby boom subsides
Multi-generational households on the rise

The Economy

Economic growth falters, but still fairly strong
Figure 5: Quarterly % change in UK GDP, Q1 2009-Q4 2015
Figure 6: UK GDP quarterly average compound growth, by industry grouping before and after the 2008/09 economic downturn
Real wages are growing – but the rate of increase has fallen
Figure 7: Employment, by gender, 2010-20
Continued low inflation – a boon for households
Figure 8: Headline CPI inflation (12-month percentage change), January 2009-January 2016
Uneven benefits of recovery
Figure 9: Share of GDP of employee earnings (including pension contributions) and private non-financial corporation gross operating surplus (corporate profitability), current prices, UK, Q1 2008-Q4 2015
Only slow improvement in consumer confidence
Figure 10: Trends in how people describe their financial situation (net of ‘Healthy’ and ‘OK’ responses are shown), February 2009-February 2016
Higher income earners are pulling away from the rest
Figure 11: Changes in financial situation compared with a year ago, by household income, February 2016
Figure 12: Future financial confidence, by household income, February 2016
Indulgent categories will benefit from the confidence of the better off
Figure 13: Spending intent in the next three months, by household income, February 2016

The People

Population and age structure
UK population continues to age
Figure 14: Trends in the age structure of the UK population, 2010-20
Shifting focus from newborns to older children
Households’ wealth
The over-55s open opportunities for new markets
Figure 15: Distribution of household total wealth, by household type: Great Britain, July 2012-June 2014
Fertility rate
Public policies are affecting family planning
Figure 16: Total fertility rate and number of live births, England and Wales, 2009-14
Household size trends
Multi-generational families becoming more common
Figure 17: UK households, by size, 2010-20
Figure 18: People in households (thousands), by type of family, UK, 2010 and 2015
One-person senior households on the rise

Consumer Expenditure – What You Need to Know

Total expenditure reaches new heights
Focus on health in in-home food and non-alcoholic drinks
The need to provide compelling experiences in foodservice
Quality over quantity in alcoholic drinks
Online channel offers opportunities in BPC
OTC sector benefits from a DIY approach
Focusing on ageing consumers in fashion
Mixed fortunes in the technology sector
Leisure and holidays benefit from rising consumer confidence
Improvement in finances drives demand for financial products

Expenditure Overview

Sector breakout
Figure 19: Consumer expenditure, by sector (£billion), 2015
Outlook for the next five years
Figure 20: Best- and worst-case forecast total value sales, 2010-20
Winners in the next five years
Figure 21: Fastest-growing market sectors, at current prices, by % growth, 2015-20
Slower-growing sectors in the next five years
Figure 22: Consumer sectors with weaker growth, at current prices, by % growth, 2015-20

In-home Food

What we think
Market – past, present, future
Figure 23: UK in-home food market value, 2010-15
Figure 24: Best- and worst-case forecast value sales of the in-home food market, at current prices, 2010-20
Mintel predictions
Winners
Chilled fish/shellfish
Herbs, spices and seasonings
Crisps, savoury snacks and nuts
Losers
Ambient wet cooking sauces
Prepacked bread
Spreads
Dairy drinks, milk and cream
Changing consumer habits
Figure 25: Changes in spending habits on in-home food in 2015, January 2016
Key consumer findings
Condiments, dressings and seasonings
Food packaging
Fish and shellfish
World cuisines
Healthy eating
Dairy drinks, milk and cream

Foodservice

What we think
Market – past, present, future
Figure 26: UK foodservice market value, 2010-15
Figure 27: Best- and worst-case forecast value sales of the foodservice market, at current prices, 2010-20
Mintel predictions
Winners
Chicken and burger bars
Pub catering
Losers
Mid-market operators
Pizza and pasta restaurants
Changing consumer habits
Figure 28: Changes in spending habits on eating out in 2015, January 2016
Key consumer findings
Menu flavours
Pizza and pasta restaurants
Burger and chicken restaurants

Non-alcoholic Drinks

What we think
Market – past, present, future
Figure 29: UK non-alcoholic drinks market value, 2010-15
Figure 30: Best- and worst-case forecast value sales of the non-alcoholic drinks market, at current prices, 2010-20
Mintel predictions
Winners
Bottled water
Coffee pods
Fruit/herbal teas
Losers
Fruit juices and smoothies
Changing consumer habits
Figure 31: Changes in spending habits on non-alcoholic drinks in 2015, January 2016
Key consumer findings
Fruit juice, juice drinks and smoothies
Carbonated soft drinks
Tea
Coffee
Sports and energy drinks

Alcoholic Drinks

What we think
Market – past, present, future
Figure 32: UK alcoholic drinks market value, 2010-15
Figure 33: Best- and worst-case forecast value sales of the alcoholic drinks market, at current prices, 2010-20
Mintel predictions
Winners
Prosecco
Beer
Flavoured cider
Losers
White rum
RTDs
Rosé wine
Changing consumer habits
Figure 34: Changes in spending habits on alcoholic drinks in 2015, January 2016
Key consumer findings
Craft alcoholic drinks
Cider
Beer
Gin
Wine
Dark spirits and liqueurs

Beauty and Personal Care

What we think
Market – past, present, future
Figure 35: UK beauty and personal care market value, 2010-15
Figure 36: Best- and worst-case forecast value sales of the beauty and personal care market, at current prices, 2010-20
Mintel predictions
Winners
Colour cosmetics
Soap, bath and shower
Losers
In-salon hair services
Suncare
Changing consumer habits
Figure 37: Changes in spending habits on beauty products and toiletries in 2015, January 2016
Key consumer findings
Colour cosmetics
Soap, bath and shower
In-salon hair services
Suncare

OTC and Pharmaceuticals

What we think
Market – past, present, future
Figure 38: UK OTC and pharmaceuticals market value, 2010-15
Figure 39: Best- and worst-case forecast value sales of the OTC and pharmaceuticals market, at current prices, 2010-20
Mintel predictions
Winners
Analgesics and cold and flu remedies
Gastrointestinal remedies
Losers
Vitamins and supplements
Sexual health
Changing consumer habits
Figure 40: Changes in spending habits on healthcare products in 2015, January 2016
Key consumer findings
Topical analgesics
Focus on diet and health
Price-conscious shopping

Clothing and Accessories

What we think
Market – past, present, future
Figure 41: UK clothing and accessories market value, 2010-15
Figure 42: Best- and worst-case forecast value sales of the clothing and accessories market, at current prices, 2010-20
Mintel predictions
Winners
Men’s clothing
Footwear
Sportswear
Losers
Handbags
Jewellery
Changing consumer habits
Figure 43: Changes in spending habits on clothing and accessories in 2015, January 2016
Key consumer findings
Womenswear
Sports fashion
Fashion accessories
Clothing retail

Household Care

What we think
Market – past, present, future
Figure 44: UK household care market value, 2010-15
Figure 45: Best- and worst-case forecast value sales of the household care market, at current prices, 2010-20
Mintel predictions
Winners
Air care
Losers
Toilet tissue
Changing consumer habits
Figure 46: Changes in spending habits on household care products in 2015, January 2016
Key consumer findings
Household paper products
Air care
Environmentally friendly household care

Technology and Communications

What we think
Market – past, present, future
Figure 47: UK technology and communications market value, 2010-15
Figure 48: Best- and worst-case forecast value sales of the technology and communications market, at current prices, 2010-20
Mintel predictions
Winners
Video games and games consoles
Telecom providers
Televisions
Losers
Tablet computers
CDs and DVDs
Changing consumer habits
Figure 49: Changes in spending habits on technology and communications in 2015, January 2016
Key consumer findings
PC and mobile use
Desktop and laptop PCs

Leisure and Entertainment

What we think
Market – past, present, future
Figure 50: UK leisure and entertainment market value, 2010-15
Figure 51: Best- and worst-case forecast value sales of the leisure and entertainment market, at current prices, 2010-20
Mintel predictions
Winners
Cinemas
Music concerts, festivals and spectator sports
Losers
Health and fitness clubs, leisure centres and swimming pools
Changing consumer habits
Figure 52: Changes in spending habits on leisure and entertainment in 2015, January 2016
Key consumer findings
Deal-seeking
Cinemas
Leisure centres and swimming pools
Health and fitness clubs

Home and Garden

What we think
Market – past, present, future
Figure 53: UK home and garden market value, 2010-15
Figure 54: Best- and worst-case forecast value sales of the home and garden market, at current prices, 2010-20
Mintel predictions
Winners
Losers
Changing consumer habits
Figure 55: Changes in spending habits on home and garden products in 2015, January 2016
Key consumer findings
Furniture purchases
Bathrooms
Garden products

Transport

What we think
Market – past, present, future
Figure 56: UK transport market value, 2010-15
Figure 57: Best- and worst-case forecast value sales of the transport market, at current prices, 2010-20
Mintel predictions
Winners
Cars and motorcycles
Car hire
Air travel
Rail travel
Losers
Used cars
Sea/tunnel travel
Key consumer findings
Car purchases
Air travel
Car hire

Holidays

What we think
Market – past, present, future
Figure 58: UK holidays market value, 2010-15
Figure 59: Best- and worst-case forecast value sales of the holidays market, at current prices, 2010-20
Mintel predictions
Winners
Beach holidays
Short city breaks
Losers
Staycations
Tourism to the US
Changing consumer habits
Figure 60: Changes in spending habits on holidays in 2015, January 2016
Key consumer findings
Holiday outlook
Beach holidays
Customer journey

Personal Finance

What we think
Market – past, present, future
Figure 61: UK personal finance market value, 2010-15
Figure 62: Best- and worst-case forecast value sales of the personal finance market, at current prices, 2010-20
Mintel predictions
Winners
Consumer credit
Investments
Losers
Cash-based savings
Changing consumer habits
Figure 63: Likelihood to switch provider if existing provider moved services online, December 2015
Key consumer findings
Low engagement in cash savings market
Appetite for borrowing
Attitudes towards general insurance products
Consumer payment preferences
Interest in use of robo-advice in retirement planning

Housing

What we think
Market – past, present, future
Figure 64: UK housing market value, 2010-15
Figure 65: Best- and worst-case forecast value sales of the housing market, at current prices, 2010-20
Changing consumer habits
Key consumer findings
Interest in buy-to-let investment
Struggles to get onto the property ladder
Renting – a lifestyle choice

Newsagents’ Goods

What we think
Market – past, present, future
Greetings cards
Cigarettes
Figure 66: UK newsagents’ goods market value, 2010-15
Figure 67: Best- and worst-case forecast value sales of the newsagents’ goods market, at current prices, 2010-20
Key consumer findings
E-cigarettes
Greetings cards

Miscellaneous Expenditure

What we think
Market – past, present, future
Figure 68: UK miscellaneous expenditure market value, 2010-15
Figure 69: Best- and worst-case forecast value sales of the miscellaneous expenditure market, at current prices, 2010-20
Winners
Funerals
Private healthcare
Losers
Disposable nappies and wipes
Pet food, care and accessories
Key consumer findings
Pet food, care and accessories
Disposable nappies and wipes
Private healthcare

The Consumer – What You Need to Know

People are starting to throw caution to the wind…
but savvy shopping habits die hard
Rising costs of utilities have the biggest impact on finances
Discounted fashion as a favourite treat
A food-loving nation
Discounts encourage shopping
Higher income earners will lead the way

Changes in Spending Habits

Spending patterns are stable
Figure 70: Changes in spending habits in 2015, January 2016
Proportions spending less are shrinking
Figure 71: Difference between proportions of people spending more and less, January 2015 and January 2016

Reasons Why People Spent Less

Consumers are still focused on savings…
Figure 72: Reasons why people spent less across all categories in 2015 (netted across all sectors), January 2016
but discounts are starting to lose their appeal
Figure 73: Reasons why people spent less in 2015, January 2016
Focus on value subdued in beauty markets
Fashion retailers suffer from widespread discounting
Spending on leisure and eating out still weak
Demand for holidays suffers from changing circumstances

Factors Impacting Financial Wellbeing

Falling oil/gas prices fail to trickle down to households
Figure 74: Factors that had the biggest impact on people’s financial situation in the past year, January 2016
Low interest rates hit retirement savings
The Sandwich Generation are financially stretched
Benefit cuts increase inequality

How People Treat Themselves

Fashion – the ultimate treat
Figure 75: What people buy themselves as a treat, January 2016
A nation of food lovers
Spending on holidays set to resume in earnest
Figure 76: What people buy themselves as a treat – Holidays, by age and household income, January 2016
‘Lipstick effect’ – no more
Figure 77: What people buy themselves as a treat – Beauty and personal care products, by gender and age, January 2016

Current Mood of British Consumers

Cautious mood prevails
Figure 78: Attitudes towards spending, January 2016
Scrimping and saving is still in vogue
Figure 79: Attitudes towards spending, January 2016
Brits remain keen bargain hunters
Figure 80: Attitudes towards spending, January 2016
Unlocking the spending power of the better off
Figure 81: Attitudes towards spending, by household income, January 2016

Appendix – Data Sources, Abbreviations and Supporting Information

Methodology
Abbreviations
Definitions
Generations

Appendix – Expenditure Overview

Figure 82: Best- and worst-case forecast for total consumer expenditure, 2015-20

Appendix – In-home Food

Figure 83: Best- and worst-case forecast for in-home food, 2015-20

Appendix – Foodservice

Figure 84: Best- and worst-case forecast for foodservice, 2015-20

Appendix – Non-alcoholic Drinks

Figure 85: Best- and worst-case forecast for non-alcoholic drinks, 2015-20

Appendix – Alcoholic Drinks

Figure 86: Best- and worst-case forecast for alcoholic drinks, 2015-20

Appendix – Beauty and Personal Care

Figure 87: Best- and worst-case forecast for beauty and personal care, 2015-20

Appendix – OTC and Pharmaceuticals

Figure 88: Best- and worst-case forecast for OTC and pharmaceuticals, 2015-20

Appendix – Clothing and Accessories

Figure 89: Best- and worst-case forecast for clothing and accessories, 2015-20

Appendix – Household Care

Figure 90: Best- and worst-case forecast for household care, 2015-20

Appendix – Technology and Communications

Figure 91: Best- and worst-case forecast for technology and communications, 2015-20

Appendix – Leisure and Entertainment

Figure 92: Best- and worst-case forecast for leisure and entertainment, 2015-20

Appendix – Home and Garden

Figure 93: Best- and worst-case forecast for home and garden, 2015-20

Appendix – Transport

Figure 94: Best- and worst-case forecast for transport, 2015-20

Appendix – Holidays

Figure 95: Best- and worst-case forecast for holidays, 2015-20

Appendix – Personal Finance

Figure 96: Best- and worst-case forecast for personal finance, 2015-20

Appendix – Housing

Figure 97: Best- and worst-case forecast for housing, 2015-20

Appendix – Newsagents’ Goods

Figure 98: Best- and worst-case forecast for newsagents’ goods, 2015-20

Appendix – Miscellaneous Expenditure

Figure 99: Best- and worst-case forecast for miscellaneous expenditure, 2015-20

List of Table

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