UK shoppers remain frugal

04 January 2011

LONDON: Shoppers in the UK are likely to avoid making big-ticket purchases this year, with anxiety regarding the economy remaining widespread.

Gocompare, the online price comparison service, surveyed 3,000 consumers to ascertain their attitudes covering probable household expenditure.

It reported that nearly two-thirds of interviewees believed the next 12 months would continue to be financially challenging.

Another 31% expressed fears about job security, which should encourage frugal behaviour.

The growing cost of living and rising bills were named among the additional primary concerns, mentioned by 22.1% of those polled.

A quarter of panellists have delayed moving home, and 21.2% took similar action when it came to buying a new car.

A further 30.3% opted against travelling abroad on holiday.

More favourably, John Miles, Gocompare's business development director, suggested the recent uptick in value added tax, applied to almost all transactions, may prove less severe than anticipated.

"While the 2.5% VAT increase is unlikely to be welcomed by most people, and retailers will undoubtedly pass this on to consumers, the true cost is actually rather small," he said.

"That said, the rise is coming at a time when a lot of people are anxious about their jobs and the general rising cost of living, and all these factors combined are making financial matters a big worry for large swathes of the population."

Data sourced from Financial Times; additional content by Warc staff