UK consumers to cut back

10 February 2011

LONDON: Many shoppers in the UK intend to cut their spending across a number of product categories, a survey has revealed.

Research firm IGD polled 1,005 people, and reported 61% expected their individual financial position to depreciate over the coming year.

This more than doubled the 27% rating recorded in similar analysis from October 2010, indicating a considerable decline in sentiment.

By contrast, only 1% of the sample anticipated they would become a "lot better off", contracting seven percentage points, and reaching 9% and 21% respectively for being "slightly better off".

Totals hit 68% for the DE socio-economic group, typically boasting comparatively low incomes, alongside 67% of 35-54 year olds, and 65% of contributors aged at least 55 years old.

A 56% majority of high-earning ABC1 consumers adopted the same stance, measured against 45% of 18-34 year olds.

Elsewhere, 29% predicted little change in this area going forward, but the prevailing mood was noticeably pessimistic.

"Shoppers are clearly feeling a lot more downbeat than they were last year and plan to do some major belt tightening," said Joanne Denney-Finch, IGD's chief executive.

Indeed, 61% proposed to trim their outlay on dining out, standing at 58% concerning clothes, 43% regarding holidays and 41% relating to home entertainment like pay-TV and DVDs.

Another 32% forecast a drop in food expenditure, the same score as those set to cut back on charitable donations and postponing home and garden improvements.

However, while food is exempt from value-added tax, which the UK government recently increased, 32% of IGD's panel erroneously believed this applied to all grocery purchases.

As such, Denny-Finch suggested the proportion of customers reining in food budgets could be "even lower" than 32% in reality, as consumers gain a true understanding of the situation.

Data sourced from IGD; additional content by Warc staff