UK consumers remain cautious

10 September 2009

LONDON: Consumers in the UK are still keeping a tight grip on their spending on both the high street and the web, evidenced by trends such as an increased interest in using coupons, and falling purchase levels of non-essential items.

According to Hitwise, the online research firm, the number of internet searches for the terms "discount vouchers" rose by 47.5% in August on an annual basis.

Google has previously reported that enquiries made by people looking for money-off coupons via its homepage were up 67% between December 2007 and the same month in 2008.

In an effort to tap into this trend, Ask Jeeves, the search engine, recently launched a new feature on its portal offering users any discount vouchers which were relevant to the results they had received.

The Future Foundation also found that nearly 70% of consumers in the ABC1 category – or around 20 million shoppers with higher incomes – have used coupons at some stage over the last six months.

By contrast, just 62% of their counterparts in the C2DEF category, which houses those on considerably lower salary levels, had taken a similar approach.

Robin Goad, UK director of research at Hitwise, argued that attempting to locate vouchers on the worldwide web is now a mainstream activity for those buying or researching goods on the internet.

"Consumer behaviour has changed so that people are looking online to research a product, looking at where to find the best price and finally doing a search to see if there is a voucher for it," he said.

Tesco was the best-performing retailer in terms of voucher-related searches, with MyVoucherCodes the top-ranked aggregation website by traffic.

With regard to the high street, the British Retail Consortium has reported that like-for-like retail sales fell by 0.1% year-on-year in August, although total sales improved by 2.2%.

Food sales climbed by 3.8% on a comparative basis, while non-food sales fell by 0.7%, with sectors including apparel, footwear, homewares and furniture all struggling.

Similarly, while online, mail order and phone sales of "non-food" items posted an uptick of 7.9% on an annual basis in this period, this rate of expansion was the lowest since May 2009.

Stephen Robertson, director general of the BRC, said it was clear the “deceptively good sales growth” over the last two months was “due to summer sun and price cuts - not a major revival in how customers are feeling. What spending we have now is all about value and essentials."

Data sourced from Financial Times; additional content by WARC staff