May 29, 2017 0500 GMT
Eighty-three percent of Britons admit they are concerned about price hikes in goods and services, while 59 percent are most worried about the soaring cost of groceries, according to a poll for Mintel’s 27th annual British Lifestyles report. Spiralling holiday costs are a concern for 35 percent, with 26 percent fearing higher prices for clothing and shoes, The Guardian wrote.
As shoppers have become used to ultra-low food prices following several years of deflation, impending price rises could prove painful for household budgets, the report warned. The slump in the value of sterling following the Brexit vote last June has pushed up the prices of imports, especially of food and clothing.
With food prices widely expected to increase in 2017, average spending on grocery shopping looks likely to increase unless shoppers find ways to maintain spending through trading down or reducing waste.
Britons have also become less materialistic, the report noted, prioritizing spending on leisure activities and experiences over material possessions in what is dubbed “the experience economy”.
Despite political turbulence following the vote to leave the EU, Mintel said consumer spending edged up 3.7 percent last year to £1.2 trillion. While growth was seen in nearly all the 17 sectors tracked by Mintel, it was notably lower across all fast-moving consumer goods markets, reflecting supermarket price wars and the impact of discounters Aldi and Lidl. By 2021, it is projected that Britons will spend £1.4 trillion per annum — equivalent to 17 percent growth over the next five years.
Beyond concerns over rising prices, Britons are also fretting about 'bigger picture' issues. The research (from an online poll of 2,000 people aged 16 and over) was carried out in February before Prime Minister Theresa May called the snap general election. But as many as 81 percent of UK consumers are concerned about the future health of the NHS, while 68 percent are worried about the UK economy and 67 percent are nervous about the state of the environment.
In contrast, less than half of all adults (48 percent) are worried about their ability to pay the bills and less than two in five (37 percent) are concerned about the burden of personal debt.
“Our research underlines particular concern about the rising cost of in-home food, and inflation is undoubtedly going to squeeze household budgets,” said Jack Duckett, the senior consumer lifestyles analyst at Mintel.
“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.”