The Wealth of the Nation
As consumer confidence rises, today's British adult is less concerned with saving and more concerned with holidays, nevertheless there remains an element of caution as paying off debts continues to rise in importance. The majority of adults still have faith in the NHS, and while the average man is living longer, the average woman is working harder for a living. Mobile phone ownership may seem essential, but we are twice as likely to depend on our computer than our phone. There are fewer slaves to fashion - we place the same importance on keeping fit as we do in watching the TV.
Confidence Continues to Rise
1. Since 1996 consumer expenditure has been rising by a greater margin than income. After years of saving, consumers had built a cushion against adversity, they are now ready to begin enjoying themselves. Confidence has risen leaps and bounds and, with it, spending plans. Consumers are looking forward to the future and how they will be able to improve their lives. Research questioning 1,958 adults about spending plans reveals having a good holiday (46%), followed by buying a new car (38%),decorating/making minor home improvements(38%) and buying something for the home(37%)to be top spending priorities.
2. Reducing debt has also risen as a priority given greater financial confidence, men are placing greater priority in clearing debts with 40% of males seeing this as a priority compared to 35% of women.
3. Home ownership is the most important lifestyle priority, with almost two-thirds considering this to be particularly important to their lifestyles, this is followed by a holiday which has changed from being a luxury to an essential,4% of women rate shopping from home as important to their lifestyle compared with just 2% of men.
Where the Money Comes From........
4. In the past ten years gross income has increased by 22% in real terms. The average personal taxable income is now over £30,000 per household, representing a 12% increase from 1989. Interestingly a 1% rise in interest rates will be equivalent to a 3-4% increase in the basic rate income tax.
5. The amount of consumer credit outstanding is £600 billion, equivalent to over £10,000 for every adult in the country. A sign of the more cautious 1990s is that 8% more of adults have paying off non-mortgage debt as a priority than thinking a credit card is important.
Where the Money Goes........
6. In the past four years the annual rise in consumer expenditure has been in excess of income.
7. Home acquisition and household services remain the largest element of the expenditure mix, at 30% of spend in 1999. Travel and finance are the next largest expenditure areas accounting for 17% each. These two areas have shown the most growth over the past decade with entertainment close third.
8. Expenditure on household services has almost doubled in the past ten years, growth has been led by domestic and garden help and post and telephone services.
9. Ownership of mobile phones is around four in ten adults, so far only 12% of the population regard them as important to their lifestyle. They are particularly essential to young women.
The Health of the Nation
10. While the NHS may have been in crisis in the winter of 2000, some 37% of adults think it is important to their lifestyle. The majority of adults still have faith in the NHS. Those aged 65 and over were most likely to feel that the NHS provides more than adequate cover for their future health needs, with over 70% satisfaction. Fewer than half of those aged 20-54 were satisfied with the degree of cover for their future needs. By contrast only 9% of adults regard private medical health insurance as important.
11. Some 51% of adults feel that keeping fit and healthy is a priority to them, which is, rated equally as important as watching the television. Those most likely to prioritise the importance of keeping fit and healthy are older people.
The People - Men Living Longer
12. Medical advances, and lifestyle changes have led to a longer male life expectancy. Life expectancy among men is getting nearer to that of women, with the result that men aged over 60 will grow by over 5% in the next five years, in contrast with women, where the number of over 60s will grow by just over 1%.
13. Of the 1.85 million jobs which have been created in the past six years, one half have been for part-time work. The number of people in part-time work for both genders has risen faster than for full-time work, this is particularly the case for men. The proportion of women of working age in the workforce is expected to rise from 73.6% to 77.2%, while there will be a fall from 94.5% to 92.1% among men.
14. By far the biggest growth in the household durables and consumables sector has been the SOHO (small office home office)area spurred on by the Internet, increased working at home and the introduction of computing in schools. This market is now worth over £2 billion. Indeed, the best performing sector in the next five years will be household electronic appliances, which will increase by 55% in real terms, this will be fuelled by the growth of computer sales, and brown goods such as tvs and DVD players. Tvs are set to benefit by the increase take-up of digital services.
15. In September 1999, over a fifth of adults regarded owning/using a computer as important to lifestyle. This is much more a feature of men aged under 54 and from AB socio economic groups.
Cars Vs Holidays
16. Expenditure on cars is even higher than travel at some £41 billion - equivalent to £1,516 per car on the road. The introduction of two new registrations in 1999 has failed to boost sales and sales of used cars have overtaken new as the largest segment of the value market. Those wishing to reduce the car culture have a challenge ahead. At the end of the 20th century, 53% of adults view owning a car as important to their current lifetyles, this rises to 59% of men and falls to 48% of women. Some 38% would buy a new car as a priority given long-term financial confidence.
17. Even though the late 1990s have seen economic prosperity return, the percentage of the population taking holidays has not reached the level of ten years earlier. The proportion of people taking one annual trip has fallen by almost five percentage points over the last 14 years, but this is offset by an increase in the number of people taking more than one trip. The need to have more than one holiday increases with age.
18. The short break holiday(under six nights)represents over a fifth of all holidays, they are now often taken in addition to the traditional 14 night holiday. Spain and France maintain their market leadership for the British holidaying abroad and together represent over a 50% market share of overseas holidays.
Food and Drink - We Are What We Eat
19. The recession proof convenience foods sector has maintained the best performance by far of any food market throughout the past 5 years, rising by 17% in real terms between 1994 and 1999. One in nine 15-24 year old men and women regard buying ready meals as important to their current lifestyle.
20. In terms of the non-alcoholic sector, in the past five years hot beverages outperformed soft drinks. This major turnaround was achieved mainly in the out of home sector, with a growth in women visiting pubs and demanding tea and coffee and the inexorable rise in coffee bars which helped to create a 5% real increase in sales, while those for soft drinks fell by 4%.
21. The wine market is driving much of the growth in the alcoholic drinks sector both in and out of the home, representing the growing sophistication of the British palate. The importance of having a drink at least once a week is biased towards young males.
22. Five times as many 15-24 year olds attach importance to smoking as do people aged 65+. While in terms of region, Scottish men are twice as likely to attach importance to smoking as London men.
Spend on Personal Goods - Clothing Weathers the Storm
23. Clothing expenditure, has shown the greatest growth in the personal goods sector, increasing by 54% in real terms between 1989 and 1999 to reach just under £28 billion. Traditionally, growth in the menswear market was slower than the women's, as a result of men having less interest in their clothing, however, this is no longer the case. The smaller sectors including footwear and jewellery have benefited from the favourable economic climate. Despite the booming clothing sector, there are fewer professed slaves to fashion in 1999.
24. The male toiletries market has benefited from an increased interest in grooming. Expenditure has risen 79% in the past ten years, heavier toiletry using youth replace the lower frequency users of more elderly male consumers.
Personal finance - Pensions a Priority
25. Just under £60 billion is spent on pensions, equivalent to £2,150 per employed person or 9% of average earnings. As a whole, a significant part of the population is now taking pensions seriously. However, there are large sections of the population where contributions are low or non-existent, hence the introduction of the stakeholder pension.
26. Four out of ten adults regard both life assurance and personal pensions as important. However, whereas there is a bias towards upper socio-economic groups in the latter, the opposite is true of life assurance, where ABs are less likely to regard it as important. The life assurance element is often included in other financial products and more likely as part of the AB remuneration package at work.
27. While saving as a priority has declined in importance for both men and women, it is home orientated goods and services such as furniture, furnishings, tvs and computers which have become of greater importance to females.
Entertainment - In-home Electronic Revolution
28. Total spending on eating out was £21.44 billion in 1999 equivalent to 42% of the in home food sector. This compares with 34% in 1989. All sectors have done better in the recovery period 1994-99, but the turnaround is more dramatic for pub catering and restaurants. Over a quarter of women in the pre-family lifestyles use restaurants as part of their lifestyle, among their male equivalents it is only 14%.
29. It has been an era of mixed fortunes for suppliers of entertainment, but generally speaking, those which have updated or offer something new have fared better. Cinema, gambling and health and fitness will lead the entertainment sector's future growth. This will be at the expense of more traditional entertainment such as museums, historic buildings, zoos and ten pin bowling.
30. The importance of leisure in the home is reflected in the growth of the leisure goods sector, but particularly the toy and sports goods sub-sector, the former having been stimulated by the introduction of electronic and computer games, which grew by 75% in real terms in the last five years. It is computer based games in particular which will fuel future expansion in the leisure goods sector.
*'British Lifestyles 2000'is available from Mintel. Price: £1095.
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