Life in Nineties’ Britain is getting more exciting, according to more than 3,000 adults questioned in a new survey by market researchers Mintel. And they are just as optimistic as they look forward to the new millennium.
The number of people agreeing that life is more exciting in the Nineties and saying they were more confident about prospects for the new millennium rose by 16 per cent last year compared with the year before, says the study.
While the phlegmatic British could never be expected to be 100 per cent happy, the findings highlight the upbeat mood of the nation after a year of an improving economy, and show that consumers have slowly gained confidence.
Mintel’s exclusive research reflects this mood of optimism. The most confident are to be found among the pre-family life stage, especially 15- to 19-year-olds and ABC1s.
Eating out is recovering from the recession – with pub catering and fast food both enjoying strong growth. The restaurant sector is now witnessing expansion through chains and themed concepts, but innovative independents are also helping. More than two-thirds of pre-family adults eat out at least once a week.
We are drinking more wine, cider and soft drinks and less white spirits, beer and tea and coffee. We are also drinking more at home across all sectors. About two-thirds of all adults believe there is nothing wrong with drinking in moderation, though three in ten adults are virtually teetotal with more in the C2Ds compared with the ABC1s.
Consumer expenditure has risen by more than a quarter over the past ten years to 585bn, with housing remaining the largest part of our expenditure. As we feel more secure financially, our spending patterns are shifting away from essentials towards firstly, securing the future, and to a lesser degree, making our current lives more comfortable.
Last year, as we began to crawl our way out of recessionary mood, markets for small ticket items such as CDs and take-always enjoyed the benefits of consumers who were treating themselves, though still holding back on big ticket purchases.
Returning confidence is also reflected among house purchasing intentions. Just under a quarter (23 per cent) plan to make a house purchase in the next two years, compared with 18 per cent of those at the start of 1996. Forty-three per cent of pre-family ABC1s plan to make a house purchase in the next two years. The picture is different for C2Ds – with the percentage unchanged at 28 per cent.
As far as consumer spending intentions are concerned, holidays emerge at the top of the list, replacing savings as consumers’ top priority overall.
Those in the pre-family life stage, however, cite savings over holidays, with many saving for major items. Cars are important to over half of all pre-family adults, and almost half (46 per cent) of C2Ds in the family life stage.
The leisure sector as a whole is likely to benefit from a more optimistic customer base. Total spend on holidays and entertainment has risen 11 per cent in real terms over the past ten years, with the National Lottery having a major influence. Key growth areas in leisure include cinemas, health and fitness, up 30 per cent and 21 per cent respectively since 1992 in real terms.
Busy lifestyles which drive the need for convenience are no longer purely affecting food markets. Cinema complexes, twinned with bowling alleys, are typical of the shift towards our need for a total leisure injection, with several leisure facilities on one site.
The 14th edition of Mintel’s annual British Lifestyles examines changes in consumer markets, identifying the areas of opportunity across 600bn of consumer expenditure, while highlighting attitudes that reflect the general mood of the nation. The result provides a snapshot of the UK consumer in 1998.
In terms of spending, there is growing confidence in a low in-flation economy. Initial reflection of this can be seen in a rise in credit uptake. House purchase net transactions have gone up 25 per cent over the past year, but have yet to reach the dizzy heights of the late Eighties.
This is not the case with other forms of credit, however: net transactions are almost double the level of 1987, reaching nearly l2bn in 1997. The difference now is a more credit-aware consumer – more likely to shop around for the best sources and interest rates.
At the same time we remain wary of debt, with the memory of the boom and bust Eighties still fresh. Credit is now more likely to be for a specific item based on a firmer ability to pay. The evidence of caution is clear – last year the difference between expenditure and income remained under one per cent, and we are unlikely to return to the “buy now, pay later” mentality.
The food sector is relatively static, with expenditure on food for in-home consumption taking a declining share of total household budget. The most dynamic sub-sectors are convenience foods, ethnic foods and snacks – again reflecting our busy lifestyles in addition to our widening tastes. The snacking culture is evident – especially among the young – with almost two-thirds of pre-family adults admitting to snacking, compared with only 14 per cent in the post family group.
Apart from a momentary increase in 1996-97, the total market for smoking continues to decline. There is a strong correlation between smoking and socio-economic group. Not only do the less affluent smoke more, but the more affluent are more likely never to have smoked. C2D empty nesters is where the habit peaks.
Growing awareness of the need for self-provision is seen in the fact that insurance and pensions remains one of the principal growth areas of consumer expenditure, with an estimated value of 70bn for last year – up almost 60 per cent since 1987.
Savings have increased at a faster rate than disposable income or expenditure, and the savings ratio remains high despite the improvement in the economy. Windfall payments have contributed to savings, with over half of all recipients planning to save their payouts – C2Ds displayed a much higher propensity to spend them.
The greatest take-up in ownership of other financial products has been in the area of storecards – reflecting the close relationships retailers have forged with consumers. Equity-linked investments, such as PEPs and unit trusts, have also increased, and share ownership is also likely to rise as about three-quarters of windfall recipients plan to hold on to their shares.
It is important to realise that memories of a recession seem to have left a permanent mark. Consumers, although increasing their propensity to spend again, will continue to search out the best offers and insist on added-value service.