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CONSUMER ATTITUDES TOWARDS RETAIL CREDIT - UK - DECEMBER 2017

Published By :

Mintel

Published Date : Dec 2017

Category :

Banking

No. of Pages : N/A

Consumer credit has been rising fast to finance recent retail sales growth. But consumer confidence is falling and incomes are under pressure. We think that consumers will start to cut back and pay down some of their debt. So all credit will fall, not just retail credit. We think that it is time retailers put more emphasis on their credit offer. By relying on credit card companies or PayPal to provide credit they are missing an opportunity to learn more about their customers.

Table of Contents

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Retail credit only a small part of all consumer credit
Figure 1: FLA members: share of credit lending by main product, 12 months to August 2017
Retail credit is losing share of all consumer credit
Figure 2: Retail credit as % all consumer credit, 2012-17
Retail credit up 2% in 2017
Figure 3: Retail credit by FLA members, 2012-22
The outlook for consumers is poor
Figure 4: Mintel’s consumer confidence tracker, Jan 2014-Nov 2017
Tightening regulation
Companies and brands
How do retailers lend?
Other IFC lenders
Interest bearing debt
Figure 5: Leading credit providers, share of all retail credit, 2016
A service to customers
The consumer
Credit cards and PayPal top the list
Figure 6: Sources of credit used in the last 12 months, September 2017
Figure 7: Profile of borrowers by credit used, September 2017
Clothing retailers most borrowed from
Figure 8: Types of retailer borrowed from, September 2017
Clothing the product most borrowed for
Figure 9: Products bought on retail credit in last year, September 2017
“Because it was there”
Figure 10: Reasons for using retail credit, September 2017
Credit only for a minority
Figure 11: Attitudes to taking out credit, September 2017
Flexibility a bonus
Figure 12: Consumer attitudes towards retail credit, September 2017
What we think
ISSUES AND INSIGHTS
Do people still need retail credit?
The facts
The implications
Interest free credit (IFC) – an unavoidable expense
The facts
The implications
So what if there’s a consumer slowdown?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Retail credit only a small part of all consumer credit
Retail credit is losing share of all consumer credit.
Retail credit up 2% in 2017
The outlook for consumers is poor
Tightening regulation
MARKET SIZE AND FORECAST
Retail credit in the context of all consumer credit
Finance and Leasing Association (FLA) data
Figure 13: FLA members: share of credit lending by main product, 12 months to August 2017
Retail credit comes in several different ways
Retail credit market size
Figure 14: Total consumer lending by FLA members, 2013-17
Figure 15: Retail credit market, 2012-17
Retail credit in decline
Figure 16: Retail credit as % all consumer credit, 2012-17
Forecast
Figure 17: New Retail credit extended by FLA members, 2012-22
Figure 18: New retail credit extended by FLA member, 2012-22
Forecast methodology
MARKET DRIVERS
GDP – Post referendum
Outlook for consumers
Figure 19: Real incomes growth: wages growth vs inflation, 2014-17
Consumer confidence weakening
Figure 20: Mintel’s consumer confidence tracker, Jan 2014-Nov 2017
Consumer credit has financed the recent boom
Figure 21: Outstanding amounts of consumer credit, 2007-17
Figure 22: Consumer credit: amounts outstanding relative to all consumer spending, 2007-17
REGULATORY AND LEGISLATIVE CHANGES
Crackdown on bad debt
But write-offs falling anyway
Availability of unsecured credit tightening
FCA investigating high cost credit
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
How do retailers lend?
Other IFC lenders
Interest bearing debt
A service to customers
LEADING PLAYERS
Home shopping
Mail order
Figure 23: Mail order companies’ terms of trade, November 2017
Littlewoods vs Very
Online pure players
Figure 24: Online pure players’ credit offers, November 2017
Furniture and carpets
Figure 25: Furniture and carpet retailers’ credit offers, November 2017
Brighthouse
DIY and electricals
Figure 26: DIY retailers’ credit offers, November 2017
Department stores
Figure 27: Department stores’ credit offers, November 2017
Clothing
Next
Figure 28: Clothing retailers’ credit offers, November 2017
Other
Credit cards
Figure 29: Leading retailers’ credit cards, November 2017
Leading credit providers
Figure 30: Leading providers of retail credit sales and credit extended, 2016 (est)
MARKET SHARE
Figure 31: Leading providers of retail credit, 2016
Figure 32: Leading credit providers, share of all retail credit, 2016
INNOVATION AND LAUNCH ACTIVITY
Soft searches
The end of long 0% balance transfers?
Opportunities in Open Banking
Helping choice and decision making
THE CONSUMER – WHAT YOU NEED TO KNOW
Credit cards and PayPal top the list
Clothing retailers most borrowed from
Clothing the product most borrowed for
“Because it was there”
Credit very unpopular
Flexibility a bonus
WHO BORROWED AND FROM WHOM
Figure 33: Sources of credit used in the last 12 months, September 2017
Figure 34: Profile of borrowers by credit used, September 2017
RETAILERS USED
Figure 35: Types of retailer borrowed from, September 2017
Figure 36: Profile of users of retail credit by type of retailer used, September 2017
Figure 37: Retailers borrowed from, September 2017
WHAT DO PEOPLE BORROW TO BUY?
Figure 38: Products bought on retail credit in last year, September 2017
Who bought what
Figure 39: Profile of users of retail credit by products bought on retail credit, September 2017
WHY DID PEOPLE USE RETAIL CREDIT
Figure 40: Reasons for using retail credit, September 2017
Figure 41: Profile of users of retail credit by reason used, September 2017
ATTITUDES TO TAKING OUT CREDIT
Figure 42: Attitudes to taking out credit, September 2017
Figure 43: Profile of shoppers by credit attitudes, September 2017
ATTITUDES TO RETAIL CREDIT
Figure 44: Agreement with the following statements, September 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Consumer research methodology
Data sources
Financial definitions
VAT
Abbreviations
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology

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