Anatomy of the UK consumer

Our survey of 2,000 Britons shows how purchasing and attitudes are changing

7 April 2021 Andrew Porteous, Co-Head, European Consumer

    Almost half of Briton’s don’t expect to travel abroad this year, even if vaccinated. Two-thirds are having groceries delivered. People are less worried about excess packaging. Most wouldn’t rent clothing How do we know? We asked 2,000 UK consumers.

    Our survey covered all regions of the UK, was evenly split on gender and divided roughly equally between under 35s, over 55s and those between. A third have annual household incomes between GBP20,000 and GBP40,000 with 11 per cent earning over GBP70,000. We asked 76 questions during February, but because this is our fifth UK Anatomy of the Consumer, it also shows trends.

    So we know people are less concerned this year about terrorism, crime, housing or the environment, but more worried about job security. Anxiety about health was lower than in any previous survey. But unsurprisingly, COVID-19 jumped straight to the top of the worry list, overtaking inflation.

    The proportion expecting house prices to fall has risen from 10 per cent to 17 per cent since last year but 28 per cent still forecast an increase. And the 43 per cent expecting higher interest rates trumps the 23 per cent looking for a cut.

    But while the UK economy is relying on a huge wave of pent-up spending to drive a post-pandemic rebound, our survey suggests 2021 will see a consumer recovery, not a consumer boom. Only a quarter of respondents expect to spend more than they do normally on eating out, entertainment or holidays in Britain when lockdowns end; about 40 per cent plan to spend less. Most people will reduce spending on foreign holidays.

    But while services continue to suffer, a small majority plans to increase expenditure on durable goods. Spending on the home rose over the past year but fell for clothing and cars. And despite savings rising during the pandemic, 32 per cent expect to save even more this year, compared with 24 per cent saving less.

    The survey shows higher expenditure on pizzas, bread and ambient foods and almost half the respondents increasing fresh-food purchases. More people cut back on red meat and salads or sandwiches than spent more, however.

    Supermarket shoppers became more concerned with service and price during the pandemic but the proportion using grocery home delivery jumped from 53 per cent to 69 per cent with most placing orders more than once a month.

    And 53 per cent of our sample have meals delivered, up from 47 per cent last year – almost half of them at least once a fortnight. However, two-thirds expect to order less as COVID-19 fades.

    Working-from-home looks set to stay with only 41 per cent of respondents planning to return to pre-pandemic work patterns and the average days in the office falling from 3.6 to 2.5 a week.

    Since our 2017 survey, drinking out has risen from 20 per cent to 32 per cent as a choice for spending disposable income but eating out has fallen over the past three years. People say they are less likely to cut back on either activity when money is tight, reducing holiday spending instead.

    Some 45 per cent want vaccination before visiting a pub or restaurant, 43 per cent before staying in a UK hotel, 39 per cent before booking a cruise – and two-thirds say they will book holidays later than usual. Some 11 per cent of Britons questioned still say their next car would be diesel, but 27 per cent claim they will buy an electric vehicle and 23 per cent a hybrid. Only 36 per cent of consumers said they are concerned about the environment, down from 44 per cent last year. A third of people do not try to buy sustainable fashion and another 30 per cent find the meaning unclear.

    First published 18 March 2021.

    Would you like to find out more? Click here to read the full report (you must be a subscriber to HSBC Global Research).

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