While the outcome of Brexit may be uncertain, a study by Mintel suggests consumers are braced for an expensive future ahead. The ‘British Lifestyles’ reports reveals that 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.
Beyond concerns over rising prices, Brits are also worried about “bigger picture” issues. As many as 81% of UK consumers are concerned about the future health of the NHS, while 68% are worried about the UK economy and 67% are nervous about the state of the environment. By contrast, people appear less concerned by issues relating to their personal situation, with half (48%) of all adults concerned about their ability to pay the bills and less than two in five (37%) worried about their level of debt.
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 in-home 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’s 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.
- The key issue is that people are discussing and challenging the status quo…
- …resulting in politicians having to be more transparent, even accountable…
- …with the consumer becoming more savvy, demanding more demonstrable value for money, everywhere.
- A useful hurdle for suppliers and retailers to keep in mind when developing and maintaining credibility with the consumer.