Mintel's presentation

Five years on: How has the recession
changed the UK consumer?
Toby Clark, Director of Research, EMEA
© 2012 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel
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The economy
(Bad news that you probably already know)
Consumer sentiment
(Bad news that you probably suspected but didn’t know for sure)
Consumer spending
(Why you should ignore most of what I’ve said about the bad news)
Consumer trends
(Why bad news can sometimes be good news)
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The economy
(Or: bad news that you probably already know)
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• Pic of Cecily
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UK GDP, 2007-2012
1.5
1.1
1.2 1.2
1.0
1
0.6
0.6
0.2
0.6
0.5
0.4 0.4
0.5
GDP change %
0.7
0.1
0
-0.1
-0.2
-0.5
-0.4
-1
-0.4
-0.3
-0.5
-0.9
-1.5
-1.5
-1.8
-2
-2.1
-2.5
2007
2008
2009
2010
2011
2012
Source: Office for National Statistics/Mintel
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UK unemployment, 2007-2012
9
8
7
6
%
5
4
3
2
1
2007
2008
2009
2010
2011
2012
0
Source: Office for National Statistics/Mintel
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The income squeeze - RPI still beating wage growth
6
5
4
3
% 2
1
0
-1
-2
2007
2008
Retail price index
2009
2010
2011
2012
Wage growth regular pay (excludes bonuses)
Source: Office for National Statistics/Mintel
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Consumer sentiment
(Or: bad news that you probably
suspected but didn’t know for sure)
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“How would you generally describe your financial situation at the
moment?”, October 2012
24%
44%
23%
7%
2%
Healthy
OK
Tight
Struggling
In trouble
Base: 2,000 internet users aged 16+
Source: GMI/Mintel
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“How does your own financial situation compare to how it was a year
or so ago?”, October 2012
4%
18%
42%
25%
11%
I’m a lot
better-off
I’m a little bit
better-off
About the
same
I’m a little bit
worse-off
I’m much
worse-off
Base: 2,000 internet users aged 16+
Source: GMI/Mintel
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“And how do you feel about your financial situation over the
next year or so?”, October 2012
24%
56%
17%
4%
I feel pretty
confident that
I’ll be ok
I’m concerned,
but should be
fine
I’m really
worried
Things can’t
get a lot worse
Base: 2,000 internet users aged 16+
Source: GMI/Mintel
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Consumer spending
(Or: why you should ignore most of
what I’ve said about the bad news)
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UK consumer expenditure, 2012
£1
trillion
Source: Office for National Statistics/Mintel
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Planned spending over the next three months, October 2012
Buy new clothes
34
Go to a concert/sporting event/theatre
23
Add to my savings
22
Book a holiday
22
Go out for an expensive meal
21
Spend money on my home (new kitchen,
redecorate, new furniture etc)
21
Buy new electrical equipment (television, PC,
games console etc)
20
Reduce non-mortgage debts (credit card,
personal loan, overdraft etc)
16
Buy major domestic appliance (washing
machine, fridge etc)
10
Buy/replace my car
10
Base: 2,000 internet users aged 16+
Source: GMI/Mintel
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Actual spending over the past three months, October 2012
Bought new clothes
50
Added to my savings
43
Booked a holiday
24
Went to a concert/sporting event/theatre
23
Went out for an expensive meal
23
Reduced non-mortgage debts (credit card,
personal loan, overdraft etc)
21
Spent money on my home (new kitchen,
redecorate, new furniture etc)
17
Bought new electrical equipment (television,
PC, games console etc)
14
Bought major domestic appliance (washing
machine, fridge etc)
Bought/replaced my car
13
8
Base: 2,000 internet users aged 16+
Source: GMI/Mintel
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The impulse buys
Clothes
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Savings
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Consumer trends
(Or: why bad news can sometimes be good news)
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Prepare for the worst
What’s it about?
Moderation and preparation are in as
consumers prepare for the worst.
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Prepare for the worst
Impact of the economic downturn on financial management, May 2012
Source: GMI/Mintel Base: 1,917 internet users
aged 18+
76
73
70
30
I keep a closer eye I spend money
I try not to borrow
It has had no
on my finances in more carefully than
money or use
impact on the way
general
I used to
credit
I manage my
money
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Prepare for the worst
What it means
Long-term stability
Better-prepared consumers
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Premiumization and indulgence
What’s it about?
The democratisation of luxury
has redefined how consumers
expect and experience
indulgence.
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Premiumization and indulgence
36% of coffee drinkers would pay more for
better instant coffee
24% of women have bought nail polish as a
personal treat
10% of women have bought new underwear
in the last year “to cheer themselves up”
(As have 1% of men...)
Source: GMI/Mintel
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Premiumization and indulgence
What it means
Still a chance to convince people to trade up
A need to concentrate on value, not price
Lifting the mood in a tough environment
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Brand re-evaluation
What’s it about?
Budget-conscious consumers are
re-assessing their brand loyalty
and redefining notions of what
constitutes “value.”
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Brand re-evaluation
41% of UK consumers
say the recession made
them question the
value of brands
Source: Premium and Value Own-label Food UK
March 2010
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Brand re-evaluation
What it means
Shopping habits in flux
The chance to break existing relationships…
…and to reach receptive customers
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The story of the sparkling wine market
1200
1000
£m
800
600
400
200
0
2007
2008
2009
2010
Worst-case forecast
2011
2012 2013 2014 2015 2016 2017
(fore) (fore) (fore) (fore) (fore) (fore)
Mintel forecast
Best-case forecast
Source: Champagne and Sparkling Wine, UK, July 2012
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The economy
Double dip recession, stubbornly high unemployment – but no
collapse.
Consumer sentiment
Some are in trouble. Most aren’t. Some are panicking. Most aren’t.
Consumer spending
£1 trillion up for grabs. Consumers still making impulse purchases.
Consumer trends
A wholesale re-evaluation of spending habits gives brands a huge
opportunity.
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Every day at Mintel…
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Toby Clark
Director of Research, EMEA
Tel
Email
Twitter
+44 (0) 20 7606 4533
tclark@mintel.com
@toby_mintel @mintelnews
© 2012 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel
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