Healthy, ethical and experiential: the Holy Trinity of British Consumer Spending

As Brexit rumbles on, British consumers continue to spend on brands and businesses that successfully tap into the Holy Trinity of current consumer behaviour: the ‘experience economy’, the booming health and wellness movement, and the desire to be more ethically conscious and eco-friendly.

These are some of the latest findings from Mintel’s British Lifestyles Report, which tracks spending across major consumer markets to provide a snapshot of how modern Britain dresses, shops and relaxes:

• Homeworking drives nightwear and loungewear boom
• There’s no place like the Instagrammable home
• Alcohol consumption falls, driving demand for premium alcohol and soft drinks
• From the dance floor to the darts floor
• What’s brewing for fermented foods
• Pot snacks get image overhaul
• Beauty consumers are nation’s most ethical shoppers

The new Mintel research also reveals that total consumer spending hit £1.32 trillion in 2018, an increase of 4% compared to the £1.27 trillion spent in 2017. By 2023, Mintel research forecasts total consumer expenditure is set to reach an estimated £1.55 trillion, rising by 17% over the next five years.

Homeworking drives nightwear and loungewear boom

Sales of underwear, nightwear and loungewear have increased by 18.8% in the last five years, with Brits spending £4.6 billion on these items in 2018. Last year, the average Brit spent £38 on underwear, rising to £46 for 35-44s, and £34 on lounge/nightwear. Meanwhile, young men’s love of premium brands is also helping push sales upwards, with 29% of male 16-35s saying premium brands are their preferred choices for underwear, nightwear and loungewear. Growth in this market is forecast to remain robust over the next five years, with consumer spending expected to reach £5.5 billion by 2023 – representing 19.1% growth.

Jack Duckett, Mintel Associate Director of Consumer Lifestyles Research, said:

“More than four million people now regularly work from home, and their demand for comfort has arguably been a contributing factor to the booming sales of loungewear. Celebrity influence is likely to have fostered the trend for chicer underwear. Candid celebs have shared images on social media in sexy and sporty underwear designs, which has helped to return the sense of fun and even aspiration to a category that otherwise runs the risk of being a price-driven basic purchase.”

There’s no place like the Instagrammable home

The homes and gardens sector was the fastest growing area of consumer expenditure between 2017-18, increasing by 11.6% during this period to £68 billion. Furthermore, splashing out on homes and gardens is projected to rise a further 37.4% over the next five years. Whether buying or renting, older Millennials are finally leaving their parents’ nest and are now turning to homeware brands to make their homes more Instagrammable. According to Mintel research, 30% of Millennials look to social media to get inspiration on home styling.

“Offering Instagram-friendly value-oriented homewares will become increasingly important as Millennials finally begin to set up homes of their own. Indeed, fashion retailers including Zara and H&M are already increasing the number of homewares products they offer. We’re also seeing a rise in gardening spend due to warmer weather. There could be a slowdown in the housing sector similar to what we saw during the 2008 recession, with people making their homes and gardens nicer rather than moving.” Jack added.

Alcohol consumption falls, driving demand for premium alcohol and soft drinks

One in five (20%) UK adults say they do not drink alcohol*, while nearly half (47%) of alcohol buyers/drinkers say they’ve cut back or limited the amount of alcohol they’ve consumed in the last 12 months**. But as Brits actively look to curb their alcohol intake, many are prepared to spend more on their drinks. As a result, premiumisation is helping to drive value sales, with overall sales of alcoholic drinks growing by 5.5% between 2017-18 to a total of £21.8 billion.

Widespread efforts among consumers to limit or reduce their alcohol intake are creating opportunities for the soft drinks industry. Estimated to be valued at £11.3 billion in 2018, the non-alcoholic drinks retail market grew by an impressive 15.4% between 2013-18, with ‘adult soft drinks’ among the fastest growing soft drinks segments.

“The fact that so many Brits are cutting down on the amount of alcohol they drink has proven to be a boon for soft drinks brands. The industry has helped to further drive this demand by launching a raft of new soft drinks – using more sophisticated packaging and flavour profiles to help secure a ‘grown-up’ audience,” Jack notes.

From the dance floor to the darts floor

The UK leisure industry continues to see positive growth, as consumers seek new ways to enjoy themselves and spend time with family and friends. The leisure market was valued at £34.3 billion in 2018, with growth expected to continue over the next five years, taking the sector to £40.3 billion by 2023.

There’s no doubt the experience economy is a driving force behind the leisure market – even the most staid of sectors is getting it right. Luxury cinemas, retro tenpin bowling alleys and social darts bars have sprung up in recent years providing an alternative late-night entertainment experience to the traditional nightclub. Today, 65% of adults say they would spend money on experiences rather than possessions, rising to 72% of Millennials.

“The unquenchable consumer enthusiasm for experience-led activities continues to help drive growth in the leisure market. Our research shows that experiences that tap into the booming health and wellness trend are amongst the most popular. But it is undoubtedly the more unusual that carry the greatest value as the young, in particular, look for unique experiences that they can share on social media.” Jack notes.

What’s brewing for fermented foods

Fermented foods have picked up something of a media buzz in recent years. According to Mintel research, 68% of UK adults say that actively looking after your gut health is essential to overall health, rising to 72% of over-55s.

“Advocates credit fermented foods with providing various health benefits including supporting gut health, boosting the immune system and helping to control sugar cravings. The European Food and Safety Authority has not approved any claims for fermented foods, but that hasn’t stopped mass-market consumers from buying into the hype. Given the heightened interest in products which support gut health, this is a trend which is likely to continue in the future, with further new product development only likely to drive its appeal among consumers.”

Pot snacks get image overhaul

A student staple, pot snacks have seen volume and value sales rocket between 2016-18, rising 26.3% in value (from £179 million in 2016 to £226 million in 2018) and 17.4% in volume, fueled by an influx of new products and brands.

“The notable focus on quality, healthiness and authenticity in new product development has helped to drive sales in the instant pot snacks category in recent years. The strong convenience factor of pot snacks combined with an improved image – thanks to these innovation themes – is expected to sustain future growth for this segment.”

Beauty consumers are nation’s most ethical shoppers

Today’s beauty consumers are the most ethically aware, as Mintel research finds UK consumers are the most likely (47%) to take ethical considerations into account before purchasing beauty and personal care goods. A close second, 44% of Brits make ethical considerations before buying in-home food and drink, while four in 10 (39%) consumers take into account ethical considerations before buying clothes or visiting foodservice outlets such as restaurants or pubs.

“Modern consumers are looking to brands to be moral and ethical on their behalf. Beauty is notably the most common area where people consider how ethical a brand is before buying. Much of this can be attributed to the sector’s focus on animal welfare and plastic waste reduction, two of the most important ethical issues for consumers today. However, it also reflects how both well-known and indie beauty brands are taking a forthright and active approach in tackling a broader spectrum of ethical issues, with brands such as Fenty Beauty focusing consumers on issues relating to equality, diversity and inclusivity, while The Body Shop has reignited its mission to end animal testing globally.”

* have not drunk alcohol in the 3 months to November 2018
**12 months to November 2018