While the outcome of Brexit may be uncertain, Mintel’s flagship British Lifestyles report reveals that consumers are braced for an expensive future ahead. Over 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 ascend.
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 following the referendum result. However, attitudes towards Brexit’s impact on the economy appear to have softened, as 31% now believe it will have a negative impact on the UK’s economic growth, down from 39% in July 2016.
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 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 research found that consumer expenditure rose by 3.7% in 2016 to reach £1.2 trillion. 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 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 foodservice, 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.
Now in it’s 27th year, Mintel’s British Lifestyles report tracks spending across all major consumer markets. Highlights from the 2017 report include:
War on sugar refreshes sales of bottled water
The upcoming 2018 soft drinks levy means that there’s no let-up in the war on sugar. Almost a quarter (23%) of non-alcoholic drinks launched in the UK in 2016 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.
Brexit increases savvy-shopping habits among holidaymakers
Brits will be putting more legwork into finding a holiday destination this year, with over half (53%) of holidaymakers saying that Brexit will mean they spend more time looking for deals and more than a third (37%) saying they will favour cheaper destinations.
One in four (26%) holidaymakers say they intend to spend more on holidays in 2017, with 29% planning more short breaks under four nights and 23% looking to take more long holidays over four nights.
Money really does buy happiness
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. Almost two thirds (63%) say their family have 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.