British consumers are bracing themselves for an expensive future ahead, with the majority of Brits expressing their concerns for price rises on goods and services.
In a survey conducted by Mintel, over four in five (83%) respondents said they are worried about price rises, with 26% fearing clothing prices would surge.
Sales of clothing, footwear and accessories are predicted to rise by 1.9% in 2017, Mintel’s flagship British Lifestyles report shows.
While the fashion market has flourished in recent years, growing by 5.6% in 2015, Brits are increasingly prioritising spending on leisure activities and experiences over material possessions, in what has become known as “the experience economy”.
The leisure and entertainment market grew by an estimated 3.2% in 2016, outpacing the 2.4% growth estimated for the clothing, footwear and accessories category.
Currently it’s menswear which is bagging growth, with sales rising by 2.8% in 2016. Just one in five (20%) men said they spent less on clothing and accessories over the past year, compared to 26% of women.
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: “Mintel research underlines 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.”
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.