Consumers Concerned About Prices

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Consumers concerned about prices
19th May 2017

By Karen Pickwick

While the outcome of Brexit may yet be uncertain, Mintel’s latest flagship British Lifestyles report reveals that consumers are braced for an expensive time ahead.

More than four in five (83%) Brits are currently concerned about seeing price rises on goods and services, with 59% worried about the mounting cost of groceries, 35% worried about the climbing cost of holidays and 26% fearing that clothes prices will go up.

Beyond concerns over rising prices, Brits are also worried about ‘bigger picture’ issues. As many as 81% of UK consumers are concerned about the future health of the NHS, while 68% are worried about the UK economy and 67% are nervous about the state of the environment. By contrast, people appear less concerned by issues relating to their personal situation, with nearly half (48%) of all adults concerned about their ability to pay bills and less than two in five (37%) worried about their level of debt.

Today, 46% of UK consumers say that Britain's vote to leave the European Union will have a negative impact on the cost of living in the UK, with this proportion unchanged from when the question was first asked in July 2016, immediately after the referendum result. However, attitudes towards Brexit’s impact on the economy appear to have softened, as only 31% now believe it will have a negative impact on the UK’s economic growth, down from 39% in July.

CONFIDENCE STILL STRONG

Jack Duckett, senior consumer lifestyles analyst at Mintel, said: “Following the UK’s vote to leave the EU, there has been a great deal of discussion about how it will impact the price of goods and services. Mintel research underlines particular concern about the rising cost of in-home food and inflation is undoubtedly going to squeeze household budgets. However, broader consumer confidence is still relatively strong. Despite rising prices, most people still expect their finances to hold up well over the next year. It's the bigger picture issues that the UK faces, such as the NHS and the economy, that are the main concern, rather than people’s own finances.” 

Despite the political turbulence, Mintel found that consumer expenditure rose by 3.7% in 2016 to reach £1.2 trillion (in the UK, one trillion is one million times a billion). While growth was seen in nearly all of the 17 individual sectors included in Mintel’s British Lifestyles report, it was notably lower across all fast-moving consumer goods (FMCG) markets, reflecting ongoing supermarket price wars.

By 2021, it is projected that Britons will spend £1.4 trillion per annum, with growth of 17% expected over the next five years. Mintel predicts that the food service, personal finance, and leisure and entertainment categories will flourish in this time, while the household care, technology and clothing and accessories markets are expected to face challenges.

HEALTHY EATING

Now in its 27th year, Mintel’s British Lifestyles report tracks spending across all major consumer markets. Highlights from the 2017 report include the fact that Brits’ eating habits are changing, with ‘healthy’ foods the driving factor.

One in three (33%) say they have tried eating less meat, while half (50%) of those who eat fish say that for health reasons they are eating more of this than a few years ago. What's more over one in five (22%) are limiting their carbohydrate intake, with 20% of users regularly substituting pasta, rice and noodles with vegetables in the style of familiar carbohydrates. Bread use in particular is going stale with just a third (34%) of Brits saying they had eaten packaged sliced bread at least once a day in 2016, down from 47% in 2014.

The war on sugar has refreshed sales of bottled water – and the upcoming 2018 soft drinks levy means there will be no let-up. Almost a quarter (23%) of non-alcoholic drinks launched in the UK last year carried a low, no or reduced sugar claim, up from 15% in 2011. The focus on sugar reduction is helping to drive growth in the bottled water market. Half (48%) of bottled water drinkers say that concerns over sugar prompted them to switch, with sales growing by 9% in 2016 to £2.2 billion.

The Mintel research reveals that when looking for happiness, you’re most likely to find it in a wallet. Across the country as a whole, 59% of Brits say they are happy with their everyday life, but this rises to 76% of people who say that their finances are healthy.

It’s not just about money however, as Brits are most likely to have a smile on their faces when they’re with the ones they love. Nearly two-thirds (63%) say their family has contributed to their happiness over the last year, while 36% say their relationship has brought them joy.

But it’s not just about human company, as 21% say their pets have been a source of happiness.