- 46% of consumers think vote to leave EU will hit cost of living
- 83% concerned about rising prices
- 59% worried about cost of groceries
Shoppers are “braced for an expensive future” and fear higher costs of food and holidays, a study has found.
Almost half – 46% – of consumers believe the decision to leave the EU will have a negative impact on the cost of living, Mintel’s latest British Lifestyles report showed.
Eighty-three per cent are concerned about price rises on goods and services: 59% are worried about the mounting cost of groceries, 35% about more expensive holidays, and 26% fear that clothes prices will climb.
The 46% who fear that Brexit will have a negative impact on the cost of living was unchanged from when the same question was asked in July last year in the immediate aftermath of the vote to quit the EU.
However, the proportion who believe Brexit will hit the UK’s economic growth fell from 39% last year to 31%.
‘Confidence relatively strong’
Mintel senior consumer lifestyles analyst Jack Duckett said: “Following the UK’s vote to leave the EU, there has been a great deal of discussion about how it will impact the price of goods and services.
“Mintel research underlines particular 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.
“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.”
Mintel said that consumer expenditure rose by 3.7% in 2016 to £1.2 trillion. There was growth in ”nearly all” of 17 sectors assessed but ”it was notably lower across all fast-moving consumer goods markets, reflecting ongoing supermarket price wars”.
By 2021, it is projected that consumers will spend £1.4 trillion per annum, as growth of 17% is expected over the next five years. Foodservice, personal finance, leisure and entertainment are expected to do well but household care, technology and clothing and accessories are expected to face challenges.
Sales of clothing, footwear and accessories are anticipated to rise by 1.9% in 2017.
Mintel reported: ”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.”