International

Brits Still Not Willing To Break The Bank

British shoppers are holding on a bit tightly to their purses and wallets, with bargain hunting and general caution continually influencing their shopping decisions.

Those findings are among the key takeaways from a recent report by the research firm Mintel titled “British Lifestyles.”

The nation’s total consumer spending in 2014 stood at £1.14 trillion, and that tally was up a little more than 6 percent over 2013’s level – but a majority of that gain was driven by growth in housing costs spanning both mortgage and rent payments.

Mintel’s findings signal what might be termed an uneven recovery across Britain. Relatively well-off consumers are beginning to tiptoe back into buying premium goods, noted the Financial Times, while “budget retailers are doing well from people still feeling hard up,” said Ina Mitskavets, senior Mintel consumer and lifestyles analyst.

Caution seems to rule the British mind when it comes to spending, said Mintel, a mindset that shows most readily in spending on leisure activities. Consumers said they spent less on a number of activities, ranging from alcohol consumption to gardening, in 2014 than they had in previous periods.

One bright spot: groceries, the only category marked by Brits as the place where they were likely to loosen the purse strings and spend more money – and even move toward buying premium items.

Many Britons find themselves “still in survival mode” even as the country emerges from recession, Mintel reported, with the “savvy shopper” looking for quality products but at bargain prices.  That may be driving a continued movement by consumers away from private label or “economy” goods found on supermarket shelves. Mintel data found that a slight majority — or 56 percent of shoppers — bought items so categorized in 2013, and that tally slipped to 46 percent last year.

One key movement toward technology and online buying has been driven by fashion – itself a hallmark of “savvy shopping,” according to Mintel. Britons “have developed an appetite for regularly updated clothes,” while online shopping, alongside the relative ease of buying and returning items, has helped spur growth.

For the time being, however, caution seems to hold sway. The U.K. economy may be picking up steam, logging its fastest growth since 2007, and real wages may be on the upswing, but Mintel pointed to a continued gap between high and low wage earners. “A few months of real wage growth cannot compensate for the prolonged squeeze on incomes,” the report stated, according to Financial Times. As segmented by wages Mintel said confidence is growing among higher earners.

Looking out toward the near and midterm, Mintel projected that total consumer expenditure will rise by 27 percent during the next five years, with housing as a key driver.

 

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