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Household cost-cutting
hits two-year high
Buying cheaper grocery brands is most popular way to save
money
The number of Britons changing their spending habits to cut down
on household expenses has hit its highest level for two years,
according to Nielsen’s latest Global Survey of Consumer
Confidence and Spending Intentions.
Over half of Britons (53%) admitted to taking cost-cutting
measures in the second quarter of this year, the highest level
since 56% did so in Q2 2015. This is in stark contrast to last
year when household cost-cutting activity hit its lowest level on
record (40%), two months after the Brexit vote.
Nearly half of Britons (45%) think the country is in a recession.
Fifty-five percent of these people think it will last for at
least another year.
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“A variety of factors has contributed to people tightening
their purse strings,” said Steve Smith, managing director,
Nielsen U.K. and Ireland. “The pound’s weakness against both
the dollar and the euro is finally feeding through to shop prices
which means real inflation is running at over 2.5%. In turn, this
remains ahead of general wage growth and consequently, real
household disposable income is being squeezed.”
Switching to cheaper grocery brands is now the most popular
tactic for saving money (cited by 30% of Britons), followed by
saving on gas and electricity bills (27%) – both of which have overtaken
spending less on new clothes, which was the most popular
cost-cutting tactic two years ago.
“Shopping behaviours
are changing in a way that is reminiscent of the aftermath of the
financial crisis in 2008/9,” notes Smith. “Shoppers are well trained to
use their household grocery budgets as a way to manage overall
household costs, particularly as the desire to treat themselves
remains. This is shown by the fact relatively fewer people are
willing to sacrifice entertainment, holidays, and takeaway
meals.”
How the UK compares
British Consumer Confidence fell seven points from 106 in the
final quarter of 2016 to 99 in Q2 2017, but still remains higher
than the European average of 85. Global confidence increased two
points to 104. A score over 100 indicates degrees of optimism,
below 100, degrees of pessimism.
Immediately before the Brexit vote, the UK was the second most
confident country in Europe (behind Denmark), now it’s the ninth.
The Philippines (130) has the highest score globally, Greece the
lowest (52).
The scores are derived
from Nielsen’s study, established in 2005, which measures attitudes
each quarter on topics including personal finances and job
prospects among 30,000+ internet consumers in 63 countries.
To view historical trends for all countries, broken down by
metrics such as financial concerns and job prospects, visit the
interactive Nielsen Global
Consumer Confidence Trend Tracker.
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