Shoppers continue to cut back in UK

21 July 2010

LONDON: A majority of consumers in the UK are continuing to adopt new behaviours in a bid to save money, according to a report.

Shoppercentric, the specialist agency, surveyed 1,000 adults in the country, with all the members of its panel assuming the position of the main decision-maker in their household when it came to choosing groceries.

Overall, 31% of participants have now implemented substantial changes to their spending habits, a rating that stood at 24% in a study published in January 2009.

Furthermore, 75% of people had modified their approach to making purchases to a meaningful - but slightly lesser - extent, indicating the "almost universal impact" of the economic downturn.

Some 87% of the sample were categorised as displaying greater levels of "prudence", with strategies ranging from avoiding waste to cooking from scratch and being careful about what they buy.

Another 82% were actively "economising" and 76% were switching stores to find the best deals, although these latter traits were losing ground while "prudence" appears to be a long-term trend.

In assessing their personal circumstances, 12% of contributors stated their employer had introduced a pay freezes, a reduction in salaries or working hours, or other equivalent measures.

This constituted an uptick from the figure of 11% outlined in analysis by Shoppercentric released in April 2009, and a corresponding total of just 5% in December 2009.

Elsewhere, 54% of respondents thought the emergency budget that was recently unveiled by the UK government would negatively affect their own situation.

Ministers plan a range of reforms to lower the nation's public deficit, including an increase to VAT, which is applied to nearly all purchases.

Around 30% of survey participants said they were not expecting to suffer any effect from the policies, while 16% believed they may actually benefit.

However, 51% of the consumers who had been hit hardest by the recession were planning to cut back on clothes and shoes, with 49% doing the same for out-of-home entertainment and 40% for holidays.

A third of the cohort also intended to trim their outlay on household and grocery products, areas that have been the primary focus of cost-cutting efforts to date.

Women have suffered more heavily in the crisis then men, with 15% of females saying their income had declined as a result of losing their job, compared with 11% of males.

Similarly, 87% of women were hoping to keep a tighter rein in their outgoings, with 79% of men taking the same view.

"It's still a very challenging time for a lot of people - despite reports of green shoots on the horizon," said Danielle Pinnington, managing director of Shoppercentric.

"Retailers need to continue to listen to shoppers and their needs and respond accordingly with good pricing and reward strategies."

Data sourced from ShopperCentric; additional content by Warc staff