New Research from the Henley Centre for Economic Forecasting
Recent research by The Henley Centre has identified a series of paradoxes in
summarising key UK consumer trends
Stronger Disposable Incomes Fuel Long-Term Growth in
The evidence that consumers are wealthier is strong. UK
consumer’s real incomes have tripled in the last 40 years, and we are 70%
better off than we were in 1979. On average, across the total UK population,
some 47% of household expenditure is now classified as “discretionary”
and is worth some £380 billion.
As incomes have risen, the proportion spent on household
expenditure has fallen to a stage where consumers now spend as much on
leisure goods and services (17% of household spend) as they do on food and
A high proportion of consumers (77% in total, and 85% of
Social Class AB) report that “there are no material comforts missing from
their life”. Accordingly, certain segments of consumer spending –
particularly leisure services – have enjoyed strong growth in recent years.
The broad leisure market, estimated to be worth some £80
billion, has grown by around 7% per annum in the last five years.
Social Change Creates New Pressures
Whilst overall consumer spending on leisure is growing
strongly, social change is influencing the market segments and products that
benefit most from, or which are do not share overall market growth. In
particular, the traditional structures of life: households, gender
distinctions, the working day, respect for traditional cultural institutions
and participation in traditional communities, are all shifting, creating new
patterns of demand.
How are these social changes, affecting the way
An important effect is that for many consumers, “time”
has become a currency. According to The Henley Centre the search for “value
for time” has become as important as “value for money”.
Consumers are searching for ways to save time on necessary activities and
“invest time” in quality leisure experiences.
As consumers are working longer hours, they are
increasingly prepared to pay money to avoid activities that soak up the
remaining available time (for example the employment of household cleaners,
grocery delivery services) and are searching out leisure activities where
they can “chill”.
The constraint on time is encouraging consumers to dabble
with leisure activities. Increasing demand for lunchtime “try-out”
courses is a good example, as is the increase in short breaks as compared
with the more traditional, longer holiday break.
Consumers are also demanding more flexible opening hours
and pricing options, less variation and improved standards in the quality of
leisure facilities and products.
They also want the “high points” or “perfect
moments” with as little hassle as possible. And they are demanding more
complex, more individual leisure products – helping them differentiate
themselves from the crowd. This means good news for more specialist leisure
companies, particularly those that can “tailor” the leisure product to
meet individual needs.
But it spells danger for more mainstream operators who rely
on high volumes of consumers buying a more standard product (such as a
packaged short-haul beach holiday) to deliver low average costs and prices.
Interestingly, researchers suggest that UK consumers are
increasingly refusing to “act their age” – an important finding for
leisure companies contemplating which products or services to offer the
[apparently] older generation. Not only must leisure companies adjust to the
changing numbers of consumers defined by actual age, social class and
household composition. They must take account of consumers who are now
defying the traditional categorisation. What price now for a new holiday
brand – the Club 18-65 Holiday?
Candeo Leisure Strategy