Spend spend spend Britons lap up the high life
Britain has become a nation of unashamed big spenders, according to a report today which reveals that the country's thirst for the high life and luxury goods and services last year propelled consumer spending to a record £1.09 trillion.
And our obsession with image and lifestyle is reflected in the boom in celebrity, gossip-based magazines, with annual sales in the influential consumer publications hitting the £1bn mark for the first time.
Glitz and glamour, jet-setting around the world and splashing out on champagne and designer clothes are no longer the reserve of the rich and famous, according to the latest research from Mintel which reveals that consumers want to do more than just read about the good life.
Despite the pressures of rising interest rates, higher fuel costs and an uncertain housing market, Britons spent 9% more in 2006 than in the previous year, exceeding a 6% growth in consumer spending between 2004 and 2005.
Buying property remained the biggest single financial outlay, accounting for almost £4 in every £10 spent. Housing saw the biggest spending increase of any sector, up 65% on 2002, Mintel said.
But holidays were Britons' number one spending priority for the coming year, according to its 2007 British Lifestyles report. Nearly a quarter - 23% - of 1,980 people surveyed for the survey said they were planning a major foreign break in the next 12 months, while 22% were aiming to take a short holiday.
Eating out was now an "intrinsic" part of British life, accounting for £17.7bn of spending - up 18% on 2002, the report said. Consumers were also trading up to more expensive food to eat at home as they turned to organic and "ethically sourced" goods. Spending on take-home food rose 14% from 2002 to hit £58.3bn, Mintel said.
Britons also wanted to splash out on a new wardrobe, with 20% looking to buy clothes and shoes.
Putting luxuries aside, in 2006 British consumers spent just over £208bn on "everyday" items or basic essentials which include food and drink, newspapers and magazines, toiletries, public transport and tobacco.
By far the biggest expenditure was on food and drink to be consumed at home - 35% of the total, on which they spent £73.7bn - followed by alcoholic drinks - 19% and costing £38.5bn. Even the tipple bought to drink at home was more likely to be champagne or expensive spirits for cocktails than in the past. Sales of wine and champagne, now worth over £10.2bn, increased 26% between 2002 and 2006, while sales of spirits and liqueurs increased 16%.
But the survey raised questions about how responsible the big spenders are, as important financial decisions such as paying off credit card loans and paying off mortgages came lower down the "spending priorities" listed by the survey respondents.
Neil Mason, senior retail analyst at Mintel, said: "The clear message is that it takes a lot to dampen down consumer confidence, as last year Brits continued to spend, spend, spend.
"Rising disposable income has led to higher expectations about the quality of life, and as a result we are increasingly trading up and spending more on better quality, premium products and services."
Mr Mason continued: "Whether people's finances and the state of the economy will allow Brits to continue prioritising holidays and eating out over day-to-day essentials, such as loan and mortgage repayments, is the current hot topic among economists. Rising interest rates and mixed messages about the housing market have, as yet, failed to dampen consumer spending in the high street. But a degree of caution is creeping into the consumer economy, which means we are likely to see a slower rate of growth in the medium term," he added.
The picture of a hedonistic Britain emerged as record numbers of personal insolvency figures for the first quarter of this year have been published, confirming that individual debt is spiralling out of control. There are an estimated 4 million UK adults below the poverty line, with new figures from the Office for National Statistics showing the effects of taxes and benefits on household income due to be published tomorrow .
Source: guardian.co.uk
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