According to new research from Mintel's flagship British Lifestyles report, the cost of living crisis has a disproportionately negative financial impact on women. Research reveals just under half (45 percent) of women feel financially worse off compared to a year ago; this compares to just over a third (35 percent) of men.
This more significant financial concern has led to a particularly cautious approach to spending over the past year. For example, 46 percent of women have cut back spending on clothing and accessories compared to 33 percent of men. Moreover, the concern is also driving a more cautious approach toward future spending as half (51 percent) of women expect to cut back on non-essential spending in response to rising prices compared to 39 percent of men. Overall, Mintel estimates that total annual consumer expenditure will grow by 6.5 percent to reach £1.73 trillion in 2023; however, much of the growth is driven by rising prices. This compares to 15 percent record growth between 2021-22.
Despite the squeeze on income, holidays are the nation's number one discretionary spending priority, as a third (32 percent) of Brits say they would most want to continue to spend on holidays even if they had to cut their overall spending. The value of the holiday market will exceed 2023's pre-COVID level, with the industry set to recover from the impact of the pandemic fully. In 2023, the amount spent on these trips is set to rise by 13 percent annually to reach £63 billion.
Francesca Smith, Senior Consumer and Lifestyles Analyst, said that while few have escaped the severe impact of the cost of living crisis, women appear to be paying a higher price.
"They are more likely to be in insecure or part-time employment, typically earn less money and bear a more significant burden of unpaid care work, leaving them more exposed to tougher economic conditions."
Smith continued that the past 18 months have placed additional pressure on women's finances.
"They are feeling worse off and more nervous for the year ahead."
The income squeeze has resulted in many savvy behaviours, which Mintel thinks will stick in the long-term, mainly where consumers have experienced financial benefits first-hand. Now, shopping at discounters, such as Aldi and Lidl, has become a reasonably class-resistant activity that will stick around.
"One category from this year's British Lifestyles research that provides optimism is holidays; we expect spending on this to continue to be prioritised."
The value British consumers place on holidays has only accelerated since the pandemic. During tough times, going on an extended break offers the ultimate escapism from everyday life and will be squeezed in wherever possible.
British consumers continue to look at ways to combine value and sustainability, leading to a steady growth in the refurbished technology market. In 2023, one in five (19 percent) Brits said they were more likely to buy second-hand technology due to the cost of living crisis. Brand perception has a definite risk if a device cannot easily be repaired and has to be discarded before the user feels they have been using it long enough.
"Beyond technology, there's also growing demand for clothing retailers to offer repair services in their stores, and we are seeing more companies adding this service. Offering additional services such as alterations and repairs is a key way for brands to appeal to savvy shoppers, with 42 percent of women's clothes buyers having repaired clothes over the past year."
Consumers have significantly reduced the frequency of their food delivery and takeaway orders: just a quarter (24 percent) of British consumers are ordering home delivery or a takeaway once a week or more in 2023, compared to 30 percent in 2021.
Cash-strapped consumers seek more special out-of-home experiences or meals prepared at home to save money. Rising costs and relentless consumer demand for free delivery and meal deals mean many delivery operators in this sector will have to work harder to maintain trading levels and protect their profit margins.
"Instead, consumers are increasingly turning to ready-to-cook meals, sales of which are set to increase 41 percent between 2022-23 to reach an estimated £301 million. Similarly, frozen ready meals are expected to grow 16.5 percent between 2022-3 to reach an estimated £649 million.