Consumer lifestyles united kingdom

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Consumer lifestyles united kingdom

  1. 1. Consumer Lifestyles - United Kingdom Euromonitor International September2008
  2. 2. Consumer Lifestyles United Kingdom  Euromonitor International Page i List of Contents and Tables Consumer Trends.......................................................................................................................................................1 End of the House Price Boom Makes Consumers Feel Poorer ...................................................................................1 Rising Fuel and Food Price Squeeze Disposable Income ...........................................................................................1 Health and Wellness Issues Present Challenges and Opportunities ...........................................................................2 Consumers Spending More Time at Home ..................................................................................................................3 Celebrity Obsession Drives Mass Market Luxury .......................................................................................................4 Population...................................................................................................................................................................5 Population Changes.....................................................................................................................................................5 Population by Gender ..................................................................................................................................................6 Population by Marital Status .......................................................................................................................................7 Population by Education..............................................................................................................................................8 Population by Rural/urban Areas ................................................................................................................................9 Table 1 Population by Age and Gender: 1995/2000/2005/2007/2010/2015 ..................................10 Table 2 Population by Age and Gender (% analysis and % growth): 1995/2007/2015/1995-2007/2007-2015.............................................................................10 Table 3 Median Age of Population: 1995/2000/2005/2007/2010/2015 .........................................11 Table 4 Median Age of Population (actual growth): 1995-2007/2007-2015..................................11 Table 5 Population Changes: 1995/2000/2002/2004/2006/2007 ....................................................11 Table 6 Population Changes (% growth): 1995-2007/2000-2007 ..................................................11 Table 7 Birth Rates: 1995/2000/2002/2004/2006/2007 ..................................................................11 Table 8 Death Rates: 1995/2000/2002/2004/2006/2007.................................................................12 Table 9 Birth Rates (actual growth): 1995-2007/2000-2007 ..........................................................12 Table 10 Death Rates (actual growth): 1995-2007/2000-2007.........................................................12 Table 11 Fertility and Birth: 1995/2000/2002/2004/2006/2007 .......................................................12 Table 12 Fertility and Birth (growth): 1995-2007/2000-2007..........................................................12 Table 13 Population by Marital Status: 1995/2000/2002/2004/2006/2007 ......................................13 Table 14 Population by MaritalStatus (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................13 Table 15 Marriage Rates: 1995/2000/2002/2004/2006/2007 ...........................................................14 Table 16 Divorce Rates: 1995/2000/2002/2004/2006/2007 .............................................................14 Table 17 Marriage Rates (actual growth): 1995-2007/2000-2007....................................................14 Table 18 Divorce Rates (actual growth): 1995-2007/2000-2007 .....................................................14 Table 19 Population by Highest Educational Attainment: 1995/2000/2002/2004/2006/2007 ......................................................................................14 Table 20 Population by Highest Educational Attainment:1995/2000/2007/1995- 2007/2000-2007 .................................................................................................................15 Table 21 Literacy Rates: 1995/2000/2002/2004/2006/2007.............................................................15 Table 22 Literacy Rates (actual growth): 1995-2007/2000-2007 .....................................................15 Table 23 Population by Urban Rural Locations and Major Cities: 1995/2000/2002/2004/2006/2007 ......................................................................................15 Table 24 Population by Urban Rural Locations/Major Cities (% analysis, % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................16 Table 25 Population Density: 1995/2000/2002/2004/2006/2007 .....................................................16 Table 26 Population Density (% growth): 1995-2007/2000-2007....................................................16 ConsumerSegmentation..........................................................................................................................................16 Babies and Infants......................................................................................................................................................16 Kids ............................................................................................................................................................................17 Tweenagers ................................................................................................................................................................18 Teens ..........................................................................................................................................................................19
  3. 3. Consumer Lifestyles United Kingdom  Euromonitor International Page ii Students ......................................................................................................................................................................20 People in Their Twenties............................................................................................................................................22 People in Their Thirties .............................................................................................................................................23 Middle-aged Consumers ............................................................................................................................................24 Pensioners..................................................................................................................................................................25 Table 27 Babies and Infants: 1995/2000/2005/2007/2010/2015 ......................................................26 Table 28 Babies and Infants (% growth): 1995-2007/2007-2015.....................................................26 Table 29 Kids: 1995/2000/2005/2007/2010/2015 ............................................................................27 Table 30 Kids (% growth): 1995-2007/2007-2015...........................................................................27 Table 31 Tweenagers: 1995/2000/2005/2007/2010/2015.................................................................27 Table 32 Tweenagers (% growth): 1995-2007/2007-2015 ...............................................................27 Table 33 Teens: 1995/2000/2005/2007/2010/2015 ..........................................................................27 Table 34 Teens (% growth): 1995-2007/2007-2015.........................................................................27 Table 35 People in their Twenties: 1995/2000/2005/2007/2010/2015 .............................................28 Table 36 People in their Twenties (% growth): 1995-2007/2007-2015 ...........................................28 Table 37 People in their Thirties: 1995/2000/2005/2007/2010/2015 ...............................................28 Table 38 People in their Thirties (% growth): 1995-2007/2007-2015..............................................28 Table 39 Middle-aged Adults: 1995/2000/2005/2007/2010/2015 ....................................................28 Table 40 Middle-aged Adults (% growth): 1995-2007/2007-2015 ..................................................28 Table 41 Older Population: 1995/2000/2005/2007/2010/2015.........................................................28 Table 42 Older Population (% growth): 1995-2007/2007-2015.......................................................29 Households................................................................................................................................................................29 Household by the Number of Occupants....................................................................................................................29 Household Annual Disposable Incomes ....................................................................................................................30 Home Ownership........................................................................................................................................................32 Purchasing Household Durables...............................................................................................................................33 Pet Population............................................................................................................................................................33 Table 43 Households by Number of Occupants: 1995/2000/2002/2004/2006/2007........................34 Table 44 Households by Number of Occupants (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................34 Table 45 Occupants per Household: 1995/2000/2002/2004/2006/2007...........................................34 Table 46 Occupants per Household (actual growth): 1995-2007/2000-2007...................................34 Table 47 Number of Households by DisposableIncome Bracket: 1995/2000/2002/2004/2006/2007 ......................................................................................34 Table 48 Number of Households by DisposableIncome Bracket (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007..............................................................35 Table 49 TotalHousing Stock and New Dwellings Completed: 1995/2000/2005/2007/2010/2015 ......................................................................................35 Table 50 TotalHousing Stock and New Dwellings Completed (% growth): 1995- 2007/2007-2015 .................................................................................................................35 Table 51 Households by Tenure and Typeof Dwelling: 1995/2000/2005/2007/2010/2015 ......................................................................................36 Table 52 Households by Tenure and Typeof Dwelling (% analysis and % growth): 1995/2000/2007/1995-2007/2007-2015.............................................................................36 Table 53 Households by Number of Rooms: 1995/2000/2002/2004/2006/2007 .............................36 Table 54 Households by Number of Rooms (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................37 Table 55 Ownership of Household Durables: 1995/2000/2005/2007/2010/2015 ............................37 Table 56 Ownership of Household Durables by Type(actualgrowth): 1995- 2007/2007-2015 .................................................................................................................37 HouseholdSegmentation.........................................................................................................................................38 Single-person Households..........................................................................................................................................38 Couples With No Children .........................................................................................................................................39
  4. 4. Consumer Lifestyles United Kingdom  Euromonitor International Page iii Couples With Children...............................................................................................................................................40 Single-parent Families...............................................................................................................................................41 Table 57 Households by Type: 1995/2000/2005/2007/2010/2015 ...................................................42 Table 58 Household by Type(% analysis and % growth) 1995/2007/2015/1995- 2007/2007-2015 .................................................................................................................42 Labour.......................................................................................................................................................................42 Working Conditions ...................................................................................................................................................42 Impact.........................................................................................................................................................................43 Employed Population by Age .....................................................................................................................................44 Unemployed Population by Age.................................................................................................................................44 Alternative Work Forms.............................................................................................................................................45 Table 59 Employed Population by Age Group: 1995/2000/2002/2004/2006/2007 .........................46 Table 60 Employed Population by Age Group (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................46 Table 61 Unemployed Population by Age Group: 1995/2000/2002/2004/2006/2007 .....................47 Table 62 Unemployed Population by Age Group (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................47 Table 63 Unemployment Rate: 1995/2000/2002/2004/2006/2007...................................................48 Table 64 Unemployment Rate (actual growth): 1995-2007/2000-2007 ...........................................48 Table 65 Part-time Employment by Sex: 1995/2000/2002/2004/2006.............................................48 Table 66 Part-time Employment by Sex (% analysis and % growth) 1995/2000/2006/1995-2006/2000-2006.............................................................................48 Income.......................................................................................................................................................................48 Annual Disposable Income ........................................................................................................................................48 Income by Educational Attainment ............................................................................................................................49 Income by Gender ......................................................................................................................................................50 Table 67 Mean Annual DisposableIncome by Education and Gender: 1995/2000/2002/2004/2006/2007 ......................................................................................50 Table 68 Mean Annual DisposableIncome by Education and Gender (% growth): 1995-2007/2000-2007........................................................................................................51 Consumer Expenditure............................................................................................................................................51 Spending on Consumer Goods and Services..............................................................................................................51 Table 69 Consumer Expenditure by Product Type: 2000/2005/2007/2010/2015 ............................52 Table 70 Consumer Expenditure by Product Type(% analysis and % growth) 1995/2007/2015/1995-2007/2007-2015.............................................................................53 Table 71 Consumer Expenditure by Commodity Type: 1995/2000/2005/2007/2010/2015 ......................................................................................53 Table 72 Consumer Expenditure by Commodity Type(% analysis and % growth) 1995/2007/2015/1995-2007/2007-2015.............................................................................53 Table 73 Consumer Prices and Costs: 1995/2000/2002/2004/2006/2007 ........................................53 Table 74 Consumer Prices and Costs (actual growth): 1995-2007/2000-2007 ................................54 Food and Non-alcoholic Beverages.........................................................................................................................54 Spending on Food and Non-alcoholic Beverages......................................................................................................54 Spending on Soft and Hot Drinks...............................................................................................................................55 Shopping for Food and Non-alcoholic Drinks...........................................................................................................55 Eating Habits .............................................................................................................................................................57 Table 75 Consumer Expenditure on Food and Non-alcoholic Beverages: 1995/2000/2002/2004/2006/2007 ......................................................................................58 Table 76 Consumer Expenditure on Food and Non-alcoholic Beverages (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007...................................................58 Table 77 Per CapitaExpenditure on Food and Non-alcoholic Beverages: 1995/2000/2002/2004/2006/2007 ......................................................................................59
  5. 5. Consumer Lifestyles United Kingdom  Euromonitor International Page iv Table 78 Per CapitaExpenditure on Food and Non-alcoholic Beverages (% growth): 1995-2007/2000-2007........................................................................................................59 Alcoholic Beverages and Tobacco ..........................................................................................................................59 Spending on Alcoholic Drinks....................................................................................................................................59 Spending on Tobacco .................................................................................................................................................60 Shopping for Alcohol and Tobacco Products ............................................................................................................61 Drinking Habits..........................................................................................................................................................62 Smoking Habits..........................................................................................................................................................63 Table 79 Consumer Expenditure on Alcoholic Beverages and Tobacco: 1995/2000/2002/2004/2006/2007 ......................................................................................64 Table 80 Consumer Expenditure on Alcoholic Beverages and Tobacco (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007...................................................64 Table 81 Per CapitaExpenditure on Alcoholic Beverages and Tobacco: 1995/2000/2002/2004/2006/2007 ......................................................................................64 Table 82 Per CapitaExpenditure on Alcoholic Beverages and Tobacco (% growth): 1995-2007/2000-2007........................................................................................................65 Clothing and Footwear ............................................................................................................................................65 Spending on Clothing and Footwear .........................................................................................................................65 Shopping for Clothing and Footwear ........................................................................................................................66 Traditional Clothing ..................................................................................................................................................67 Fashion Trends ..........................................................................................................................................................67 Table 83 Consumer Expenditure on Clothing and Footwear: 1995/2000/2002/2004/2006/2007 ......................................................................................67 Table 84 Consumer Expenditure on Clothing and Footwear (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007..............................................................68 Table 85 Per CapitaExpenditure on Clothing and Footwear: 1995/2000/2002/2004/2006/2007 ......................................................................................68 Table 86 Per CapitaExpenditure on Clothing and Footwear (% growth): 1995- 2007/2000-2007 .................................................................................................................68 Housing.....................................................................................................................................................................68 Spending on Housing .................................................................................................................................................68 Renting Vs. Buying .....................................................................................................................................................70 Utility Costs................................................................................................................................................................70 Maintenance and Repair............................................................................................................................................71 Table 87 Consumer Expenditure on Housing: 1995/2000/2002/2004/2006/2007 ...........................71 Table 88 Consumer Expenditure on Housing (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................72 Table 89 Per Capita Expenditure on Housing: 1995/2000/2002/2004/2006/2007 ...........................72 Table 90 Per Capita Expenditure on Housing (% growth): 1995-2007/2000-2007..........................72 Household Goods and Services...............................................................................................................................73 Spending on Household Goods and Services.............................................................................................................73 Shopping for Household Goods.................................................................................................................................73 Cooking Habits ..........................................................................................................................................................74 Do-it-yourself and Gardening....................................................................................................................................75 Table 91 Consumer Expenditure on Household Goods and Services: 1995/2000/2002/2004/2006/2007 ......................................................................................76 Table 92 Consumer Expenditure on Household Goods and Services (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007..............................................................76 Table 93 Per CapitaExpenditure on Household Goods and Services: 1995/2000/2002/2004/2006/2007 ......................................................................................77 Table 94 Per CapitaExpenditure on Household Goods and Services (% growth): 1995-2007/2000-2007........................................................................................................77
  6. 6. Consumer Lifestyles United Kingdom  Euromonitor International Page v Health Goods and Medical Services.......................................................................................................................77 Spending on Health Goods and Medical Services .....................................................................................................77 Healthcare System......................................................................................................................................................78 Major Causes of Death ..............................................................................................................................................79 Smoking Prevalance...................................................................................................................................................79 Reported Aids Cases ..................................................................................................................................................80 Drug Abuse................................................................................................................................................................80 Health and Wellness...................................................................................................................................................81 Table 95 Consumer Expenditure on Health Goods and Medical Services: 1995/2000/2002/2004/2006/2007 ......................................................................................82 Table 96 Consumer Expenditure on Health Goods and Medical Services (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007...................................................82 Table 97 Per CapitaExpenditure on Health Goods and Medical Services: 1995/2000/2002/2004/2006/2007 ......................................................................................82 Table 98 Per CapitaExpenditure on Health Goods and Medical Services (% growth): 1995-2007/2000-2007........................................................................................................83 Table 99 Share of Total Health Expenditure in GDP: 1995/2000/2002/2004/2006 .........................83 Table 100 Healthy Life Expectancy at Birth: 1995/2000/2002/2004/2006 ........................................83 Table 101 Healthy Life Expectancy at Birth (actual growth): 1995-2006/2000-2006 .......................83 Table 102 Healthcare Workers: 1995/2000/2002/2004/2006/2007 ....................................................83 Table 103 Healthcare Workers (% growth): 1995-2007/2000-2007 ..................................................84 Table 104 Major Causes of Death by Disease: 1995/2000/2002/2004/2006/2007.............................84 Table 105 Major Causes of Death by Disease (% growth): 1995-2007/2000-2007...........................84 Table 106 Obese Population: 1995/2000/2002/2004/2006/2007........................................................85 Table 107 Obese Population (actual growth): 1995-2007/2000-2007................................................85 Table 108 Smoking Prevalance: 1995/2000/2002/2004/2006/2007 ...................................................85 Table 109 Smoking Prevalance (actual growth): 1995-2007/2000-2007 ...........................................85 Table 110 Reported AIDS Cases: 1995/2000/2002/2004/2006/2007.................................................85 Table 111 Reported AIDS Cases (% growth): 1995-2007/2000-2007 ...............................................85 Transport ..................................................................................................................................................................86 Spending on Transport...............................................................................................................................................86 Air Transport..............................................................................................................................................................87 Road Transport..........................................................................................................................................................87 Rail Transport............................................................................................................................................................88 Transport Infrastructure............................................................................................................................................89 Table 112 Consumer Expenditure on Transport: 1995/2000/2002/2004/2006/2007 .........................90 Table 113 Consumer Expenditure on Transport (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................90 Table 114 Per Capita Expenditure on Transport: 1995/2000/2002/2004/2006/2007 .........................90 Table 115 Per Capita Expenditure on Transport (% growth): 1995-2007/2000-2007........................90 Communication........................................................................................................................................................91 Spending on Communications....................................................................................................................................91 Television, Cable and Satellite...................................................................................................................................91 Printed Media ............................................................................................................................................................92 Telephones .................................................................................................................................................................93 Computers and Internet .............................................................................................................................................94 E-commerce ...............................................................................................................................................................94 M-commerce...............................................................................................................................................................95 Table 116 Consumer Expenditure on Communications: 1995/2000/2002/2004/2006/2007 ......................................................................................96 Table 117 Consumer Expenditure on Communications (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.............................................................................96
  7. 7. Consumer Lifestyles United Kingdom  Euromonitor International Page vi Table 118 Per CapitaExpenditure on Communications: 1995/2000/2002/2004/2006/2007 ......................................................................................96 Table 119 Per CapitaExpenditure on Communications (% growth) 1995-2007/2000- 2007:...................................................................................................................................96 Table 120 Penetration of Televisions and Number of TV Channels: 1995/2000/2002/2004/2006/2007 ......................................................................................96 Table 121 Penetration of Televisions and Number of TV Channels (% growth): 1995- 2007/2000-2007 .................................................................................................................97 Table 122 Penetration of Cable and Satellite Television: 1995/2000/2002/2004/2006/2007 ......................................................................................97 Table 123 Penetration of Cable and Satellite Television (% growth): 1995-2007/2000- 2007....................................................................................................................................97 Table 124 National and International Phone Calls, TelephoneLines in Use and Mobile Phone Users: 1995/2000/2002/2004/2006 .........................................................................97 Table 125 National and International Phone Calls, TelephoneLines in Use and Mobile Phone Users(% growth): 1995-2006/2000-2006 ...............................................................97 Table 126 Household PC Penetration and Internet Usage: 2000/2002/2004/2006/2007 ...................98 Table 127 Household PC Penetration and Internet Usage (% growth): 2000-2007 ...........................98 Leisure and Recreation............................................................................................................................................98 Spending on Leisure and Recreation .........................................................................................................................98 Shopping for Leisure Goods ......................................................................................................................................99 Leisure Time...............................................................................................................................................................99 Culture .....................................................................................................................................................................100 Attitudes To Sports...................................................................................................................................................101 Travel and Tourism..................................................................................................................................................101 Table 128 Consumer Expenditure on Leisure and recreation: 1995/2000/2002/2004/2006/2007 ....................................................................................103 Table 129 Consumer Expenditure on Leisure and recreation (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007............................................................103 Table 130 Per CapitaExpenditure on Leisure and recreation: 1995/2000/2002/2004/2006/2007 ....................................................................................103 Table 131 Per CapitaExpenditure on Leisure and recreation (% growth): 1995- 2007/2000-2007 ...............................................................................................................104 Education................................................................................................................................................................104 Spending on Education ............................................................................................................................................104 Pre-primary Education ............................................................................................................................................105 Primary and Secondary Education ..........................................................................................................................106 Higher Education .....................................................................................................................................................107 Adult Education........................................................................................................................................................108 Table 132 Consumer Expenditure on Education: 1995/2000/2002/2004/2006/2007.......................109 Table 133 Consumer Expenditure on Education (% growth): 1995-2007/2000-2007 .....................109 Table 134 Per Capita Expenditure on Education: 1995/2000/2002/2004/2006/2007 ......................109 Table 135 Per Capita Expenditure on Education (% growth): 1995-2007/2000-2007.....................109 Hotels and Catering...............................................................................................................................................109 Spending on Hotels and Catering ............................................................................................................................109 Going Out.................................................................................................................................................................110 Eating Out................................................................................................................................................................111 Spending on Accommodation Services ....................................................................................................................111 Table 136 Consumer Expenditure on Hotels and Catering: 1995/2000/2002/2004/2006/2007 ....................................................................................112 Table 137 Consumer Expenditure on Hotels and Catering (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007...........................................................................112
  8. 8. Consumer Lifestyles United Kingdom  Euromonitor International Page vii Table 138 Per CapitaExpenditure on Hotels and Catering: 1995/2000/2002/2004/2006/2007 ....................................................................................112 Table 139 Per CapitaExpenditure on Hotels and Catering (% growth): 1995- 2007/2000-2007 ...............................................................................................................112 Miscellaneous Goods and Services.......................................................................................................................113 Spending on Miscellaneous Goods and Services.....................................................................................................113 Personal Hygiene and Personal Grooming.............................................................................................................113 Shopping for Cosmetics and Toiletries ....................................................................................................................114 Banking, Savings and Financial Services ................................................................................................................115 Pension.....................................................................................................................................................................116 Table 140 Consumer Expenditure on Miscellaneous Goods and Services: 1995/2000/2002/2004/2006/2007 ....................................................................................117 Table 141 Consumer Expenditure on Miscellaneous Goods and Services (% analysis and % growth): 1995/2000/2007/1995-2007/2000-2007.................................................118 Table 142 Per CapitaExpenditure on Miscellaneous Goods and Services: 1995/2000/2002/2004/2006/2007 ....................................................................................118 Table 143 Per CapitaExpenditure on Miscellaneous Goods and Services (% growth): 1995-2007/2000-2007......................................................................................................118 Structure of the Report..........................................................................................................................................118 Definitions...............................................................................................................................................................119 Summary 1 Country Coverage ............................................................................................................119
  9. 9. Consumer Lifestyles United Kingdom  Euromonitor International Page 1 CONSUMER LIFESTYLES IN THE UNITED KINGDOM CONSUMERTRENDS End of the House Price Boom Makes Consumers Feel Poorer UK home owners have become used to seeing the notional value of their homes rise at a much faster rate than inflation over the past decade. This situation produced a substantialwealth effect, as many consumers borrowed money at relatively low rates of interest using equity withdrawal loans or even remortgaging. This additional spending power drove consumption,as consumers splashed out on home improvement, cars, holidays, appliances and consumer goods,as well as a frenzy of property investment, which drove prices higher still. However, since the so-called credit crunch dawned in the summer of 2007, these halcyon days have become a memory. With mortgage credit becoming increasingly unavailable, first-time buyers are all but priced out of the market and rising interest rates have made mortgage repayments less affordable. The value of residential property has begun to fall, having declined by an average of 10% in the 12-months to July 2008. Moreover, the number of properties repossessed by mortgage lenders in the UK grew by 48% during the first half of 2008. According to the Council of Mortgage Lenders, there were 18,900 repossessions in the six months to June, up from 12,800 during the same period last year. Outlook It had been argued by many that UK house prices would only fall if unemployment rose, as occurred during the previous housing market crash of the early 1990s. This view has now been thoroughly discredited. Indeed, the danger for the UK economy now appears to be the risk of a significant contraction in construction activity leading to an increase in unemployment. The threat of consumer price inflation represents a further threat, as it has forced the Bank of England to raise interest rates to levels that are putting the finances of many households under pressure. The continuing risk in the housing market is that the combination of high interest rates and rising unemployment and repossession rates could establish a vicious circle, wherein falling house prices lead to a reduction in the level of economic activity, which results in further declines in housing values.Such a scenario could conceivably see residential property values falling 40% below their peak valuations, putting hundreds of thousands ofUK homeowners into “negative equity,” a situation where their home is worth less than what they paid for it. Impact Deflation in the residential property market is likely act as a drag on UK consumption levels until well into 2009 and perhaps until 2010. As a result, UK residents are likely to move home less often. This situation will depress demand for home furnishings, garden equipment, appliances and consumer electronics, as many people tend to buy these items when they move home. However, demand for DIY products may actually be boosted by this trend, as consumers may choose to redecorate and improve their existing home, rather than moving. The negative wealth effect produced by falling house prices will lead to declines in overall consumption, particularly for goods and services with a high income elasticity of demand, i.e., where demand is extremely responsive to changes in income. For example, many consumers will postpone replacing their cars until after the downturn is over, while many other consumers will become more-value conscious when shopping for necessities like food, clothing and footwear. Rising Fuel and Food Price Squeeze Disposable Income There were significant increases in 2007 and 2008 in the prices that UK consumers paid for food, petrol and utilities. The price of hydrocarbons like oil and gas reached record prices on commodity markets, due to a combination of tight supply, rising demand from developing economies and security concerns in the Middle East and elsewhere, as well as a dose of speculative investment. As a result, prices paid by consumers to put fuel in their cars, heat their homes and cook their food have risen sharply. Moreover, rising prices have also had a
  10. 10. Consumer Lifestyles United Kingdom  Euromonitor International Page 2 significant indirect impact by raising production costs,pushing producerprice inflation (PPI) to levels unseen since the early 1980s. PPI reached 10% in July 2008, driven by a 30% year-on-year increase in input costs. Apart from rising petrol, gas and electricity prices, the cost of basic foodstuffs has also been rising rapidly. Again, driven primarily by a combination of supply problems and rising global demand exacerbated by speculation,the price of wheat, corn, soy, meat and dairy products have risen sharply on international markets, significantly raising the input costs of packaged food manufacturers. As a result, the cost of such basics as bread, milk, eggs, cheese and cooking oil have risen significantly. Indeed, food price inflation surged to 9.5% in the year to July 2008, as supermarkets passed on higher energy and transport costs to their customers. Outlook By the middle of 2008, there was some easing in the input costs ofthe packaged food industry, as speculation unwound and a relatively favourable harvest was reported. However, it is very difficult to predict future price movements in such a volatile market. What can be said is that high prices are producing increased supplies,as more land is brought into cultivation, which may provide some relief in the medium term. However, with rising affluence and changing dietary habits in China, India and elsewhere likely to drive strong demand and climatic fluctuations set to exacerbate fluctuations in supply,it is reasonable to speculate that both producers and consumers will have to adjust to the end of the era of low food prices. Impact With petrol prices higher than £1/litre and a standard loaf of bread costing more than £1, the purchasing power of consumers is being undermined. In April 2008, it was estimated that the annual grocery shopping bill of the average UK family had risen by £750. As a result, the discretionary income of many households is being squeezed, leaving them with less money to spend on necessities.This problem is likely to be particularly acute for those on low and fixed incomes, such as pensioners,who spend a relatively high proportion of their income on such necessities as food and fuel. This trend has already helped to boost sales at discounters like Aldi and Lidl. On the other hand, chains whose appeal is more closely associated with quality, such as Marks & Spencer, have been suffering. Premiumisation will prove more elusive in the packaged food market, as consumers increasingly seek out products that offer value for money. This is likely to provide drive increased demand for economy and private label products.It could be particularly damaging for evolving market segments like organic and fair trade products,as hard-pressed consumers will be less willing to pay premium prices for products like organic milk and fair trade coffee. Moreover, rising commodity prices reduce the incentive for farmers to produce food organically, which could ultimately make organic products even more expensive. However, while rising prices may impede growth in this market, such segments as organic milk appear to be mature enough to weather it. This trend has also resulted in a weakening of demand for meal solution products,such as ready meals, which many consumers increasingly perceive as poor value. On the other hand, it may boost demand for ingredients,as an increasing number of consumers begin to cook in an effort to save money. This has also led to resurgence in demand for products like dessert and cake mixes. The demand for foodservice is also being hit, at least at the top end, as consumers become increasingly value-conscious.However, quick service outlets like McDonalds’ and KFC, which offer meals for as little as a couple of pounds,have benefitted from this situation.There are still opportunities for growth in confectionary and premium packaged food, as consumers still appear willing to pamper themselves with little treats while foregoing larger treats,like restaurant meals. If fuel prices remain high for an extended period, demand for public transport may increase and sales of automotive products may suffer. Even if aggregate car sales are unaffected, their composition is likely to be radically altered, as consumers choose smaller and more fuel-efficient models. Conversely, sales of sport utility vehicles and larger cars with more powerful (and hence less fuel-efficient) engines are likely to suffer. Health and Wellness Issues Present Challenges and Opportunities Driven high up the political agenda by incessant media coverage and a wave of public concern regarding increased levels of obesity in the UK population (particularly among children), health and wellness remains an issue of concern for those in the packaged food industry. Increasing public scrutiny regarding the healthfulness of UK diets may pose several challenges to the industry.
  11. 11. Consumer Lifestyles United Kingdom  Euromonitor International Page 3 Outlook The UK has the highest obesity rate in Europe. Currently, around 10% of children in the UK are obese,while at least 20% are overweight. A report from the Foresight project entitled “Tackling Obesities: Future Choices” predicts that by the 2025 around 40% of the population will be classed as obese.Moreover, it contends that by 2050, 60% of men, 50% of women, 50% of primary schoolboys and 20% of primary schoolgirls will be obese. It projects that by 2050 dealing with obesity will cost the health service seven times what it spends today.The wider cost to society, it reports, will be around £45 billion. This outcome is not inevitable. Countries as Finland have shown that it is possible to intervene in society on a large scale in order to significantly improve public health. However, the UK population has shown itself to be resistant to such top-down initiatives (which are frequently condemned as “nanny statism” by many), so it is questionable whether the Finnish experience could be successfully repeated in the UK. In the medium to long term, the UK market is likely to become increasingly polarised in this regard. On one side will be the increasingly health-conscious affluent households.On the other side will be poorer households that are less knowledgeable about the health implications of their food choices and who will continue to consume an energy-dense diet. While sales of organic and whole foods will increase among the former group,those in the latter group are likely to remain ensconced in their current eating habits. Impact Many consumers have become concerned about the high fat, salt and sugarcontent of many packaged foods and non-alcoholic beverages.The government has also expressed its concern from a public health perspective, as the incidence of such lifestyle diseases as hypertension and Type 2 diabetes rises, putting additional strain on the government’s health budget.These concerns have forced the industry to reformulate many products,ranging from crisps to ready meals, by lowering their fat, salt and sugarcontent. There is also growing concern regarding the manner in which food and beverage products that are perceived to be unhealthy are marketed, particularly to children. Although the government has been somewhat reluctant to intervene directly, it has forced the industry to change the way in which it displays nutritional information on food packaging in an effort to make this information more accessible to consumers. The government has also forced the industry to abandon television advertising targeted directly at children, in terms of both content and time placement on TV schedules.However, the industry has responded by increas ingly turning to internet marketing, an area that remains largely unregulated. Overall, these changes have made it more difficult for the industry to market its products,particularly at launch. Regardless, the trend towards health awareness presents packaged food and beverage manufacturers with a myriad of new product opportunities.There has been, for example, an increased demand for low-fat, low-salt and low-sugar alternatives to existing products,creating new opportunities for brand creation and growth. Products like smoothies, bottled water and fruit juices have enjoyed increased sales at the expense of carbonated drinks. This trend has also led to dynamism in the functional and fortified segment, fuelling the rise of such products as probiotic drinking yoghurts and bread and milk fortified with omega oils. It has also led to the emergence of entirely new product categories, such as organic. However, the health and wellness trend is far from universal in packaged food. Sales of fat- and salt-laden convenience and snackfoods remain robust,as does the quick service sectorof the food service industry.These products remain particularly popular with young adults and men of all ages. This was best illustrated by the poor sales of salads and other healthy alternatives to burgers and chips at McDonald’s and other fast food outlets. Indeed, some fast food chains now appearto be making a virtue out of appearing unhealthy in their marketing, by emphasising the “manliness” of their products. Consumers Spending More Time at Home The expression “an Englishman’s home is his castle” has never rung truer than in recent years. Rising property prices in the city have forced many people to commute lengthy distances to work, leaving many consumers are too tired to socialise out of the home on a regular basis during the week. Moreover, having to spend a growing proportion of their income on mortgage repayments has left many consumers with little income for socialising.
  12. 12. Consumer Lifestyles United Kingdom  Euromonitor International Page 4 Other home owners are simply determined to derive the maximum utility from what they considerto be an extremely costly investment. Increased worries regarding the incidence of crime and the risk of terrorist attacks have also contributed to this trend. Other factors include the rising cost of transportation,increased social isolation and the new ban on smoking in public places. Outlook Although deteriorating macroeconomic conditions would appear, at first glance, to encourage this trend even further, it is often said that misery loves company, which implies that bad economic news could encourage people to socialise more. However, with such innovations as high-definition television and social networking becoming more prevalent and as disposable incomes become squeezed by rising food and fuel costs,a renaissance in socialising outside of the home would appearunlikely at the moment. Impact This trend, called “cocooning,” has influenced consumer demand in many ways. It has boosted value sales of homewares and home furnishings,as consumers demand more luxury at home. This trend has also increased demand for such appliances as fridge freezers and cookers, where brand names and styling have become much more important in purchasing decisions.It has had an impact in consumer electronics, where flat-screen TVs and surround sound systems have enabled people to replicate the cinema experience in their homes. It has also boosted demand for DIY and garden products,as many consumers now consider their gardens to be an extension of their living area and, as a consequence,they are more willing to spend money on items like decking, garden furniture and patio heaters. Cocooning has also had a significant impact on the composition of the alcohol market by shifting volume sales away from the off-channel and towards the on-channel. According to pressure group The Campaign for Real Ale, over 50 pubs are now closing permanently in the UK every month. This has resulted in the on-trade engaging in more vigorous price competition, which some have claimed is encouraging binge drinking. Celebrity Obsession Drives Mass Market Luxury Rising levels of affluence have made luxury goods more accessible to a much larger number of UK consumers in recent years.Formerly confined to the wealthiest of UK households,fashion houses like Prada, Armani and Yves Saint Lauren are now marketing and selling clothing, footwear and even furniture and mobile phones to a much wider group of middle-class consumers. Even many poorer consumers have been influenced by this trend, with Burberry in particular becoming popular with members of this group. Chains like TK Max specialise in selling designerclothes at steep discounts,bringing luxury brands within the reach of even those on modest incomes. This has caused some concern among some that brands will cannibalise themselves by attempting to widen their appeal too much, undermining the exclusivity on which their appeal was originally based. This trend has also been driven by the increased availability of credit, with many consumers now having multiple credit cards, as well as access to overdrafts,personal loans and equity release products.Anotherfactor has been the apparently irresistible rise of celebrity culture, with women and, increasingly, men becoming more interested in imitating the “look” of their favourite actresses,pop singers,sportsmen,models and even reality TV contestants.This trend has been driven by intensified blanket media coverage of the lives of the rich and/or famous, with magazines like Heat, Grazia and OK! devoted to displaying their sartorial choices. Outlook With the debt-driven consumption of much of the past decade now winding down, some have argued UK shopping habits will be characterized by a sense ofsobriety. However, while economic growth is now slowing, there are no clear signs that UK consumers are “shopped out,” with total non-food sales volumes rising by 4.4% year-on-year during the three months to June 2008. Retail sales growth will be increasingly hard to come by over the next couple of years, but there are few concrete signs that the UK is about to be taken over by a “new Puritanism,” as some have predicted. Impact
  13. 13. Consumer Lifestyles United Kingdom  Euromonitor International Page 5 The trend towards luxury has had an indirect impact on the mass market, as retailers like Topshop and H&M release collections designed by the likes of Kate Moss and Karl Lagerfeld. These competitively priced collections have proven to be popular among consumers, often selling out within hours and being resold at huge premiums on such auction sites as E-Bay. A thriving market for cheap clothes that imitate far more expensive designer items has also developed.Although this has resulted in a number of legal actions for copyright infringement, it has nevertheless proved lucrative for such mass-market clothing retailers as Primark. Apart from clothing and footwear, this trend has also had a significant impact on the skincare, fragrance and cosmetics markets, driving value sales as well as widening the market. Sales of watches and jewellery, even luxury cars, have also been boosted by the trend towards ostentation,exemplified by the “bling” culture of many pop stars and sports figures. Shopping has now become a hobby for many people, with shopping centres increasingly becoming “destinations” where people are willing to spend an entire day. Compulsive shopping has also become more an issue,with an increasing number of people becoming clinically addicted “shopaholics.” All of this activity has driven rapid growth in retail sales and investment in the sector.The UK is following the lead of the US and becoming increasingly dependent on consumption as its main driver of economic growth. POPULATION Population Changes Between 1995 and 2007, the UK’s population grew by nearly 5%, reaching 60.7 million. The main factor behind this increase was immigration, which grew from 64,000 immigrants in 1995 to 154,000 in 2007. Meanwhile, a decline in the birth rate (from 12.6 to 12.1 per 1,000 inhabitants)during the review period was more than offset by a decline in the death rate (from 11.1 to 9.6 per 1,000 inhabitants). As a result, the gap between the number of births and the number of deaths in the UK grew from 70,000 in 1995 to more than 120,000 in 2007. The declining death rate is, in part, a reflection of the huge additional funding that the National Health Service (NHS) has received since the Labour government took power in 1997. Total NHS funding stood at £35 billion in 1997/98, but is projected to reach £110 billion in 2010/11. Falling birth rates were due, in part, to increased female employment. The rising cost of housing also acted as a disincentive in starting and raising large families. Immigrants to the UK are either economic migrants or political refugees (at least nominally). The former group is by far the largest. The 2004 enlargement of the EU, which added a number of Eastern European countries to the group,has been the main driver of migration into the UK in recent years. Unlike most other large EU economies (including Germany and France), the UK allowed unlimited migration from the new member states,resulting in a surge in migrants from the so-called A8 countries (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia). Moreover, the accession ofRomania and Bulgaria to EU membership in 2007 provided a further boost to migration flows. According to the Home Office, first-time applicants for the Worker Registration Scheme grew from 212,000 in 2005 to 232,000 in 2006. Poland was the leading source of migrant workers from the A8 countries, with 65% of the total number of applicants in 2006, followed by Lithuania (11%) and Slovakia (1%). The vast majority of migrant workers from the A8 countries are young,with 82% aged between 18 and 34 years.Just 4% were accompanied by dependents underthe age of 17. It is difficult to estimate the total number of migrant workers in the UK at any one time, as the Home Office does not yet collect data on returning migrants. According to Sir Michael Fallon MP, chair of the Treasury sub - committee overseeing official statistics, the annual population figures produced by the Office for National Statistics fail to show the true scale of immigration. However, a study from the Institute for Public Policy Research found that half of the Eastern European nationals who came to work in the UK between 2004 and 2008 have returned home. Including dependants,there were 7,705 asylum applications in the first quarter of 2008, 14% higher than the first quarter of 2007. There were 4,435 initial decisions in the first quarter of 2008, 26% less than in the first quarter of 2007. Of these applicants, 21% were granted asylum, 11% were granted either humanitarian
  14. 14. Consumer Lifestyles United Kingdom  Euromonitor International Page 6 protection or discretionary leave and 68% were refused. These figures imply that around 10,000 additional asylum seekers a year remain in the UK. However, this assumes that all of those refused leave to remain in the country are deported,which is unlikely to be the case.Many disappearinto the black economy, so the true figure is probably somewhat higher. A record 164,635 people were granted British citizenship in 2007, according to government data. Almost one-third of these new citizens were from Africa, while more than one- fifth were Asian. While many young people are migrating to the UK, an increasing number of older people are leaving th e country.Figures from the Office for National Statistics suggest 400,000 people emigrated from the UK in 2006, almost half of whom were citizens. The most popular destinations for British citizens leaving the UK were Australia and New Zealand, Spain, France and the United States.According to pressure group Migrationwatch UK, around 5.5 million UK citizens resided overseas in 2006. Moreover, the Institute for Public Policy Research has predicted that up to one million more will leave the UK between 2006 and 2011. Those leaving the UK tend to fall into two distinct groups:they are either immigrants returning to their country of origin or UK- born individuals moving abroad for lifestyle reasons,such as seeking a betterclimate or what they perceive as a more relaxed lifestyle. Many in the latter group tend to be older and more affluent than the average UK resident. Impact These data showthat immigration to the UK should be thought ofmore in terms of a turnstile (with people entering and leaving), rather than as a set of floodgates through which an inexorable tide of foreigners are flowing, threatening Britain’s sense ofnational identity. Regardless, increased levels of migration are having profound economic and social effects on the UK. The main economic impact of immigration has been positive. An influx of young workers has boosted employment and helped to keep the economy competitive by depressing wage inflation. Migrant workers are particularly crucial in such low-wage industries as agriculture and hospitality, which would undoubtedly face severe labour shortages in the absence of migrant workers. They have also played an important role in the UK’s recent construction boom, with the “Polish plumber” becoming something of an archetype for the new breed of working migrant. Perhaps most importantly, immigration is slowing the greying of the UK’s population. The median age in the UK increased from 36 years-old in 1995 to 39 years-old in 2007. In the absence of large-scale immigration, that age would be even higher. As a result, the problem of providing adequate pensions for an ageing population is less pressing in the UK than in many otherWestern European countries,particularly Italy. Immigration is also having an impact on UK consumption patterns.London's Centre for Economics and Business Research reckons Britain's burgeoning Polish community has a disposable income of $8.5 billion. Supermarket chains such as Tesco and even convenience stores are increasingly aware of the potential of the UK’s growing immigrant population as a market and are targeting them with ethnic products.Heinz recently launched in the UK a range of products,including beef tripe in broth and stuffed cabbage in tomato sauce,under its Polish Pudliszki brand. Banks are also increasingly targeting this group.Poles opened 100,000 checking accounts with Lloyds Bank in 2006, making them Lloyd's largest group of foreign customers. Increased immigration has also boosted the aviation industry,particularly low-fare airlines such as Ryanair and Easyjet, which have greatly increased the number of routes they fly from the UK to Eastern Europe. The social impact of increased immigration is more worrying, at least to some. Government health, education and welfare services have come under pressure in areas that have been particularly attractive to immigrants. As well, in the wake of the 2005 terrorist attacks in London, social tensions have increased,particularly in towns and cities with substantialAsian populations. However, there is mounting evidence that the surge in immigration to the UK that has occurred in recent years is now ebbing as the UK economy begins to slow and the value of sterling declines against currencies from Eastern European countries,such as the Polish zloty. Moreover, EU accession has boosted economic growth in many of these countries, making emigration a less enticing prospect. Population by Gender The UK’s population has become more balanced in genderterms in recent years. The proportion of women in the total population eased from 51.4% in 1995 to 51% in 2007. Moreover, it is projected to decline to 50.8% by 2015. The main factor behind this trend is the change in UK life expectancy. According to 2006 data from the
  15. 15. Consumer Lifestyles United Kingdom  Euromonitor International Page 7 Office of National Statistics, men born in the UK have a life expectancy of almost 77 years, compared with 81 years for women. However, during the period 1983-85, life expectancy at birth was 71 for men and 77 for women. This change has been due, in part, to the increased attention paid to male health issues by men themselves. British men are now less stoical about their health and far more aware of health issues than previously. They have become less reluctant to present themselves for early treatment. As well, the change can be attributed to increased NHS funding for the treatment of such male-specific conditions as prostate cancers. Nevertheless, strong regional variations exist, with men in northern England and, particularly, men in Scotland much less aware of or concerned with health and wellness issues.This keeps the average male life expectancy below 70 years in some urban areas. Anotherfactor that has influenced the decline in the number of women in the UK has been a bias towards male children among certain ethnic minorities, particularly Asians.According to a study conducted by Dr Sylvie Dubuc of Oxford University, for children born in the UK to India-born mothers, the sex ratio was 1040 boys for every 1000 girls in 1995 rising to 1080 boys for every 1000 girls in 2005. Unlike in many other European countries (such as Sweden, where they are banned),sex determination tests are common in the UK and are advertised openly, as doctors feel the test helps detect genetic abnormalities in the foetus and provides parents with more options in dealing with them. Impact Apart from increasing demand for health services,increased male life expectancy will have implications for pensions.Pensions are expected to provide for a less comfortable standard of living than in prior years as they will be stretched over longer periods of time. This is likely to lead to a blurring of the traditional lines between work and retirement and to the evolution of “gradual retirement.” The number of men aged 55 to 64 years in paid employment is likely to grow as the number of men capable of working up to and beyond the traditional retirement age of 65 increases and the UK economy becomes more service oriented, reducing the number of jobs requiring manual labour. With the population of “semi-retirees” likely to grow substantially,convenience will become a more important factor in the UK consumer market, as older people become more “time poor” and while enjoying more discretionary income. This situation is expected to lead to greater demand for a variety of services, including foodservice and holidays. Population by Marital Status People in the UK are increasingly delaying their marriages, with the average age of men at their first marriage increasing from 27.9 years to 30.1 years between 1995 and 2007. A growing number of young people have chosen to cohabit prior to marriage, now that the social stigma that used to cling to those “living in sin” has now all but disappeared.Moreover, public attitudes towards having children outside of marriage have relaxed, and marriage is no longer considered a prerequisite for starting a family. As a result, the proportion of births accounted for by unmarried parents grew from 33.5% in 1995 to 43.3% in 2006. The “kidult” phenomenon may also play a role in the increasing number of delayed marriages. As more young people come to view their 20s as an extension of their teenage years,when responsibilities are considered peripheral, new family creation is delayed. An additional factor influencing marriage rates has been the increasing number of divorces in the UK. The proportion of divorcees in the overall population grew from 5.5% in 1995 to 7.6% in 2007. This trend has led to a reduction in the proportion of married people in the UK population, from nearly 45% in 1995 to 40% in 2007. Conversely, the proportion of single people grew from 42.5% to 46.2%. As male life expectancy has improved, the number of widows and widowers has declined, reducing their proportion from 7% in 1995 to 6.1% in 2007. Impact The decline in the marriage rate and the rise in the number of divorces have led to a significant increase in the number of single-person households.Government figures showthe number of single-person households rose from 12% of all households in 1971 to 18% in 2001. The figure is expected to reach 38% by 2026 as people get married later in their lives and as divorce rates rise. Studies have found that this growth is mainly being driven by men aged 25-44, particularly single never-married men aged 35 to 44. On the one hand,living alone is expensive because it leads to increased energy usages and creates more waste per-capita than shared homes. On the other hand,those living alone have fewer dependents and,as a result,
  16. 16. Consumer Lifestyles United Kingdom  Euromonitor International Page 8 more disposable income. On the whole, the personalconsumption of more affluent individuals is probably boosted by living alone, while that of lower-income individuals probably suffers, particularly as poor families are entitled to a wide range of benefits and tax credits. Single people tend to spend a higher proportion of their income on such things as holidays, consumer electronics and socialising, boosting demand for alcoholic beverages and home-entertainment systems,for example. Living alone has also led to an increase in pet ownership, as pets are often perceived as a remedy for loneliness, and this will drive growth in pet food and pet care products. More broadly, the trend towards single-occupancy households is having a significant qualitative impact on consumption patterns,particularly in the housing sector.The recent boom in the UK housing market was attributed, in part, to the rise in the number of single-person households,which increased overall demand for housing units and led to an increase in apartment construction,particularly in cities like Birmingham, Manchester,Leeds and Cardiff. The trend has also significantly influenced the packaged food sector,where growth in the number of single- person households has driven demand for smaller package sizes and convenience.Those living in single-person households are less likely to cook on a regular basis,a factor that has driven growth in the foodservice market, particularly in the takeaway and home delivery segments. The growing number of single-person households has also lead to an increase in demand for such products as ready meals, frozen and chilled pizza, easy-cookrice and microwavable burgers and sausages.Those living in single-person households are also less likely to observe formal meal times, often consuming snacks rather than proper meals. They are also likely to favour smaller package sizes and resealable packaging, as these features reduce waste and save them money. Singles’ shopping habits differ from those in other household types,as they are more likely to make more frequent forays to shop for food and come home with less, as opposed to making a single big trip to the supermarket on a weekly or fortnightly basis.This makes this group an ideal market for convenience stores,and this has increased the attractiveness ofthis retail format for large supermarket chains such as Tesco and Sainsbury’s, who have both invested heavily in the format in recent years. Population by Education The level of education among the UK population rose substantially between 1995 and 2007. The proportion of the population with no more than a primary education fell from 15.6% to 11.1% during this period, while the proportion of the population with a third-level qualification grew from 17.2% to 23.1%. In between, the proportion of people with no more than a secondary education was relatively stable, growing by just 0.6 percentage points to 46.6%. In 2007, just 0.5% of the UK population had no education,while the literacy rate stood at a nearly universal 99.8%. While third-level qualifications are highly regarded among many in the UK, there is a growing feeling that the quality of some third-level courses is poor and that they do little to equip students foremployment. In general, British people hold the opinion that third-level qualifications, while useful, are far from essentialfor a successfulcareer, particularly in business. This increase in education attainment has been driven in part by increased government expenditure. Public expenditure on education in the UK was equivalent to 5.5% of GDP in 2003-04, up from 4.7% in 1997-98. Expenditure on education in England stood at £60.9 billion in 2007-08. Public expenditure on education in the UK as a percentage of GDP and as a percentage of total public spending is just below the OECD country average. Much of the additional expenditure has been put into efforts to lessen inequality by providing children from less affluent backgrounds with improved educational opportunities. Although such programmes as Sure Start, which aims to “achieve betteroutcomes for children, parents and communities” by “increasing the availability of childcare for all children, improving health and emotional development for young children and supporting parents as parents and in their aspirations towards employment,” are not classroom-based, they are nonetheless aimed at increasing rates of educational attainment. Moreover, in its efforts to increase both the quality and duration of education,the government has recently promoted the development of City Academies to replace failing comprehensive schools in urban areas. However, a significant degree of discrimination is still evident in the public education system,as the best schools are invariably found in more affluent areas with high property prices acting as a barrier to access for poorer families.
  17. 17. Consumer Lifestyles United Kingdom  Euromonitor International Page 9 A further priority for government is to encourage higher levels of participation in third-level education. However, this is no longer free and,as a result, the typical student leaving university will have accumulated a debt of £12,000. On the other hand,the student loan systemis structured so that repayments do not have to be made until several years after the student attains initial employment. Moreover, the interest rate charged on this debt is lower than commercial bank rates. According to government data, during the 2007-08 financial year the amount borrowed to covertuition fees grew by 176.7% over prior year, reaching £1.1 billion. The government- appointed Student Loans Company was owed £21.9 billion by 2.7 million borrowers at the end of the 2007-08 financial year. Of these,1.7 million had already started repaying their loans. In Scotland, students continue to benefit from free university education. Impact The rise in the level of educational attainment should provide a long-term benefit to UK economic growth by making the country more competitive internationally. While reports on the impact of increased government investment in education have been mixed, it is thought that investment is also likely lead to a reduction in poverty rates, which will inevitably boost consumption. The UK’s growing student population is having an impact on consumption patterns,as many students are avid consumers of convenience food, preferring microwavable ready meals and frozen pizzas to meals cooked from scratch using fresh ingredients. They are also more likely to consume takeaways regularly and to skip meals entirely, grazing instead on snacks. Alcohol consumption levels are also higher among this group than for the population as a whole. In general, students are less amenable to the health and wellness trend than the general population, although their lifestyles and poordiets make them a lucrative market for such products as vitamin supplements and energy drinks. The recent introduction of university fees could influence the purchasing power of university graduates, reducing their disposable income and, perhaps,forcing them to delay homeownership. The process also familiarises them with debt at an early stage,making them more willing to use credit cards,overdrafts and personal loans.Concerns have been expressed that this situation has exacerbated the debt problems facing many British households. Population by Rural/urban Areas Since the end of the 19th century, the UK has been an urban society,a result of the rural population coming to the cities to take advantage of the work opportunities created by the industrial revolution. Over the past decade, the balance between urban and rural households has been relatively stable, albeit with a slight shift towards the latter. While the number of urban households increased from 21.9 million in 1995 to 23.6 million in 2007 (an increase of 7.8%), the number of rural households grewfrom 2.4 million to 2.8 million (an increase of 16.7%). As a result, the proportion of urban households has declined slightly, from 90% to 89.6%. Many young people in rural areas continue to be attracted to urban areas because of their superior education and employment opportunities.This is being more than offset, however, by older people moving to rural areas. Typically, this occurs after marriage or the birth of a child, as rural areas are perceived as being a better environment for raising children. As well, housing costs are usually cheaper. Older consumers in urban areas benefitted most from the house price inflation over the past decade, and some have taken advantage of this by selling up and moving to rural areas. London is by far the largest city in the UK, reporting a population of 7.5 million in 2007. In contrast,the country’s second-largest city, Birmingham, had a population of less than one million. There are strong regional variations in settlement patterns.The southeast ofEngland is among the most heavily populated regions of Europe, while large swathes of Scotland, Wales and Northern Ireland remain predominantly rural. Impact Many of the people migrating from urban to rural areas are affluent, and they are helping to raise the level of housing demand in rural areas. Moreover, they often help build new demand for products that would previously have had a very limited appeal in rural areas, such as premium packaged food products.In many areas, particularly in the southeast ofEngland, the countryside has been suburbanised,with consumption patterns now similar to those of urban areas. Rural dwellers also tend to shop less frequently than their urban counterparts,
  18. 18. Consumer Lifestyles United Kingdom  Euromonitor International Page 10 making them a particularly attractive market for large retail outlets. As a result, large supermarket chains are endeavouring to increase their presence in smaller towns.While this strategy frequently encounters a level of local resistance, the chains are attempting to address concerns by sourcing more of their products locally. The UK’s increasing rural population is also heavily dependent on their cars as the primary means of transport, as many of new rural dwellers still work in cities and public transport in rural regions is often inadequate. Cutbacks led to the closure of many regional rail lines after the Second World War, although proposals to construct a number of new lines have been mooted recently. Many commuters must drive for as long as thirty minutes to the nearest train station before boarding a train to work. As a result, extreme commuting (travelling up to 90 minutes each way daily) has become increasingly commonplace. As an alternative, many more affluent rural dwellers maintain a small flat near work as a pied de terre, where they often spend severalnights a week. When staying in the city, the consumption patterns of these individuals are similar to those of singles. They consume far more snacks,convenience food and takeaways than they would do at their main residences .This shift of middle-aged, middle-class consumers to the countryside is also influencing overall urban consumption patterns,which are now becoming more “youthful.” As a result, convenience has become a more important factor to consumers. Table 1 Population by Age and Gender: 1995/2000/2005/2007/2010/2015 '000 1995 2000 2005 2007 2010 2015 0-4 yrs 3,831 3,576 3,415 3,532 3,646 3,670 5-9 yrs 3,819 3,830 3,587 3,458 3,418 3,660 10-14 yrs 3,641 3,838 3,847 3,728 3,601 3,441 15-19 yrs 3,405 3,629 3,958 4,013 3,911 3,663 20-24 yrs 4,002 3,485 3,874 4,046 4,160 4,055 25-29 yrs 4,563 4,105 3,710 3,901 4,142 4,339 30-34 yrs 4,568 4,616 4,217 3,951 3,833 4,230 35-39 yrs 4,022 4,554 4,666 4,570 4,258 3,865 40-44 yrs 3,768 4,022 4,550 4,685 4,681 4,271 45-49 yrs 4,056 3,746 3,987 4,200 4,524 4,668 50-54 yrs 3,280 4,000 3,679 3,708 3,941 4,483 55-59 yrs 3,008 3,203 3,890 3,825 3,607 3,885 60-64 yrs 2,804 2,889 3,064 3,369 3,755 3,510 65-69 yrs 2,666 2,605 2,702 2,696 2,898 3,586 70-74 yrs 2,516 2,339 2,338 2,350 2,456 2,674 75-79 yrs 1,698 2,030 1,942 1,964 1,980 2,121 80+ yrs 2,296 2,319 2,636 2,712 2,811 2,999 Female 29,787 30,151 30,665 30,952 31,356 32,038 Male 28,156 28,634 29,395 29,755 30,265 31,084 TOTAL 57,943 58,785 60,060 60,707 61,621 63,122 Source: National statistics, UN, Euromonitor International Note: As of 1st January Table 2 Population by Age and Gender (% analysis and % growth): 1995/2007/2015/1995- 2007/2007-2015 % of total Population 1995 2007 2015 1995-2007 2007-2015 0-4 yrs 6.61 5.82 5.81 -7.81 3.93 5-9 yrs 6.59 5.70 5.80 -9.46 5.85 10-14 yrs 6.28 6.14 5.45 2.39 -7.69 15-19 yrs 5.88 6.61 5.80 17.84 -8.71 20-24 yrs 6.91 6.66 6.42 1.10 0.22 25-29 yrs 7.87 6.43 6.87 -14.50 11.22 30-34 yrs 7.88 6.51 6.70 -13.52 7.08 35-39 yrs 6.94 7.53 6.12 13.61 -15.42 40-44 yrs 6.50 7.72 6.77 24.33 -8.84 45-49 yrs 7.00 6.92 7.39 3.54 11.13 50-54 yrs 5.66 6.11 7.10 13.04 20.91
  19. 19. Consumer Lifestyles United Kingdom  Euromonitor International Page 11 55-59 yrs 5.19 6.30 6.16 27.16 1.58 60-64 yrs 4.84 5.55 5.56 20.15 4.19 65-69 yrs 4.60 4.44 5.68 1.14 33.02 70-74 yrs 4.34 3.87 4.24 -6.57 13.77 75-79 yrs 2.93 3.24 3.36 15.69 7.97 80+ yrs 3.96 4.47 4.75 18.12 10.61 Female 51.41 50.99 50.76 3.91 3.51 Male 48.59 49.01 49.24 5.68 4.47 TOTAL 100.00 100.00 100.00 4.77 3.98 Source: National statistics, UN, Euromonitor International Note: As of 1 January Table 3 Median Age of Population: 1995/2000/2005/2007/2010/2015 years 1995 2000 2005 2007 2010 2015 Median age of Population 36.36 37.47 38.69 39.10 39.83 40.81 Median age: CLIFE 26.26 28.03 29.63 30.23 31.05 32.32 countries Source: National statistics, UN, Euromonitor International Table 4 Median Age of Population (actual growth): 1995-2007/2007-2015 Years 1995-2007 2007-2015 Median age of Population 2.74 1.71 Median age: CLIFE countries 3.97 2.09 Source: National statistics, UN, Euromonitor International Table 5 Population Changes: 1995/2000/2002/2004/2006/2007 '000 1995 2000 2002 2004 2006 2007 Live births 732.05 679.28 668.78 716.00 740.50 738.60 Deaths 645.49 608.37 606.22 583.08 586.00 584.87 Net migration 64.56 143.62 157.57 227.16 159.50 154.24 Balance 151.11 214.54 220.13 360.07 314.00 307.97 Source: National statistics, UN, Euromonitor International Table 6 Population Changes (% growth): 1995-2007/2000-2007 % change 1995-2007 2000-2007 Live births 0.89 8.73 Deaths -9.39 -3.86 Net migration 138.92 7.40 Balance 103.80 43.55 Source: National statistics, UN, Euromonitor International Note: As of 1 January Table 7 Birth Rates: 1995/2000/2002/2004/2006/2007
  20. 20. Consumer Lifestyles United Kingdom  Euromonitor International Page 12 per '000 inhabitants 1995 2000 2002 2004 2006 2007 Birth rates 12.6 11.5 11.3 12.0 12.2 12.1 Average of CLIFE 18.3 16.6 15.9 15.7 15.5 14.5 countries Source: National statistics, UN, Euromonitor International Table 8 Death Rates: 1995/2000/2002/2004/2006/2007 per '000 inhabitants 1995 2000 2002 2004 2006 2007 Death rates 11.1 10.3 10.2 9.7 9.7 9.6 Average of CLIFE 8.6 8.2 8.2 8.1 8.2 8.1 countries Source: National statistics, UN, Euromonitor International Table 9 Birth Rates (actual growth): 1995-2007/2000-2007 Percentage points 1995-2007 2000-2007 Birth rates -0.48 0.60 Average of CLIFE countries -3.76 -2.13 Source: National statistics, UN, Euromonitor International Table 10 Death Rates (actual growth): 1995-2007/2000-2007 Percentage points 1995-2007 2000-2007 Death rates -1.52 -0.72 Average of CLIFE countries -0.53 -0.16 Source: National statistics, UN, Euromonitor International Table 11 Fertility and Birth: 1995/2000/2002/2004/2006/2007 As stated 1995 2000 2002 2004 2006 2007 Fertility rates 1.71 1.64 1.64 1.77 1.79 1.78 (children born per female) Average age of women at 28.31 29.13 29.34 29.48 29.70 29.80 first childbirth (years) Average age of women at 28.16 28.52 28.70 28.78 28.96 29.06 childbirth (years) Births outside marriage 33.57 39.48 40.63 42.08 43.31 — (per 100 births) Source: National statistics, EuromonitorInternational Table 12 Fertility and Birth (growth): 1995-2007/2000-2007 as stated 1995-2007 2000-2007
  21. 21. Consumer Lifestyles United Kingdom  Euromonitor International Page 13 Fertility rates (percentage points) 0.07 0.14 Average age of women at first childbirth (years) 1.49 0.68 Average age of women at childbirth (years) 0.90 0.54 Births outside marriage (percentage points) Source: National statistics, EuromonitorInternational Table 13 Population by Marital Status: 1995/2000/2002/2004/2006/2007 '000/as stated 1995 2000 2002 2004 2006 2007 Married 26,025 25,233 24,893 24,568 24,364 24,273 Divorced 3,196 3,766 4,019 4,270 4,523 4,641 Widowed 4,080 3,942 3,873 3,792 3,733 3,704 Single 24,643 25,845 26,433 27,070 27,774 28,088 TOTAL 57,943 58,785 59,218 59,700 60,393 60,707 Average age of men at 27.90 29.60 30.10 30.12 30.42 30.60 first marriage (years) Average age of women at 26.00 27.50 27.90 28.05 28.34 28.48 first marriage (years) Average age of men at 29.26 30.25 30.52 30.68 31.02 31.18 marriage (years) Average age of women at 27.74 28.68 28.93 29.06 29.35 29.50 marriage (years) Source: National statistics, EuromonitorInternational Table 14 Population by Marital Status (% analysis and % growth): 1995/2000/2007/1995-2007/2000- 2007 as stated 1995 2000 2007 1995-2007 2000-2007 Married (% of total 44.91 42.92 39.98 -6.73 -3.80 Population/% change) Divorced (% of total 5.51 6.41 7.65 45.24 23.25 Population/% change) Widowed (% of total 7.04 6.71 6.10 -9.21 -6.03 Population/% change) Single (% of total 42.53 43.96 46.27 13.98 8.68 Population/% change) TOTAL 100.00 100.00 100.00 4.77 3.27 Average age of men at — — — 2.70 3.38 first marriage (change in years) Average age of — — — 2.48 3.57 women at first marriage (change in years) Average age of men at — — — 1.92 3.09 marriage (change in years) Average age of — — — 1.76 2.87 women at marriage (change in years) Source: National statistics, EuromonitorInternational
  22. 22. Consumer Lifestyles United Kingdom  Euromonitor International Page 14 Table 15 Marriage Rates: 1995/2000/2002/2004/2006/2007 per '000 Population 1995 2000 2002 2004 2006 2007 Marriage rates 5.6 5.2 4.9 5.2 5.1 5.1 Average of CLIFE 5.9 5.5 5.3 5.3 5.3 5.3 countries Source: National statistics, EuromonitorInternational Table 16 Divorce Rates: 1995/2000/2002/2004/2006/2007 per '000 Population 1995 2000 2002 2004 2006 2007 Divorce rates 2.9 2.6 2.7 2.8 2.9 2.9 Average of CLIFE 1.7 1.7 1.8 1.8 1.8 1.8 countries Source: National statistics, EuromonitorInternational Table 17 Marriage Rates (actual growth): 1995-2007/2000-2007 Change in percentage points 1995-2007 2000-2007 Marriage rates -0.41 -0.05 Average of CLIFE countries -0.57 -0.24 Source: National statistics, EuromonitorInternational Table 18 Divorce Rates (actual growth): 1995-2007/2000-2007 Change in percentage points 1995-2007 2000-2007 Divorce rates -0.01 0.29 Average of CLIFE countries 0.15 0.13 Source: National statistics, EuromonitorInternational Table 19 Population by Highest Educational Attainment: 1995/2000/2002/2004/2006/2007 1995 2000 2002 2004 2006 2007 No education ('000) 393 368 359 344 331 326 ('000) Primary ‘000) 9,043 7,886 7,392 7,123 6,881 6,728 Secondary ‘000) 27,231 28,464 28,750 28,627 28,800 28,913 Higher ‘000) 9,984 10,823 11,656 12,714 13,615 14,023 Other ('000) 11,292 11,244 11,061 10,892 10,766 10,718 TOTAL ('000) 57,943 58,785 59,218 59,700 60,393 60,707 Compulsory education — 5 5 5 5 5 commencement age (years) School leaving age — 16 16 16 16 16 (years) Higher education 1,813 2,024 2,241 2,247 2,198 2,187 students inc. universities ('000)
  23. 23. Consumer Lifestyles United Kingdom  Euromonitor International Page 15 ('000) Source: National statistics, Euromonitor International Table 20 Population by Highest Educational Attainment: 1995/2000/2007/1995-2007/2000-2007 1995 2000 2007 1995-2007 2000-2007 No education (% of 0.7 0.6 0.5 -17.14 -11.45 the Population / % growth) Primary (% of the 15.6 13.4 11.1 -25.60 -14.69 Population / % growth) Secondary (% of the 47.0 48.4 47.6 6.18 1.58 Population / % growth) Higher (% of the 17.2 18.4 23.1 40.44 29.56 Population / % growth) Other ('000) 19.5 19.1 17.7 -9.4 -7.7 TOTAL (% of the 100.0 100.0 100.0 4.77 3.27 Population / % growth) Higher education — — — 20.58 8.02 students inc. universities (% of the Population / % growth) Source: National statistics, EuromonitorInternational Table 21 Literacy Rates: 1995/2000/2002/2004/2006/2007 % of Population aged 15+ 1995 2000 2002 2004 2006 2007 Adult literacy rate — 99.5 99.7 99.8 99.8 99.8 Average of CLIFE 86.1 90.5 91.2 91.7 92.2 92.5 countries Source: National statistics, EuromonitorInternational Table 22 Literacy Rates (actual growth): 1995-2007/2000-2007 Percentage points 1995-2007 2000-2007 Adult literacy rate — 0.35 Average of CLIFE countries 6.41 2.01 Source: National statistics, EuromonitorInternational Table 23 Population by Urban Rural Locations and Major Cities: 1995/2000/2002/2004/2006/2007 '000 1995 2000 2002 2004 2006 2007 Rural households 2,407.26 2,633.80 2,682.19 2,722.19 2,751.86 2,758.14 Urban households 21,871.14 22,580.00 22,878.29 23,178.12 23,481.61 23,639.43
  24. 24. Consumer Lifestyles United Kingdom  Euromonitor International Page 16 Major cities London 6,822 7,100 7,203 7,301 7,438 7,502 Birmingham 965 968 968 969 974 976 Glasgow 645 631 624 618 616 614 Liverpool 475 469 466 463 463 462 Leeds 430 440 444 447 453 456 Source: National statistics, EuromonitorInternational Table 24 Population by Urban Rural Locations/Major Cities (% analysis, % growth): 1995/2000/2007/1995-2007/2000-2007 As stated 1995 2000 2007 1995-2007 2000-2007 Rural households (% of 9.92 10.45 10.45 14.58 4.72 households/% growth) Urban housholds (% of 90.08 89.55 89.55 8.09 4.69 households/% growth) Major cities London(% of Population/ 11.77 12.08 12.36 9.97 5.66 % growth) Birmingham(% of 1.67 1.65 1.61 1.17 0.87 Population/% growth) Glasgow(% of Population/ 1.11 1.07 1.01 -4.76 -2.70 % growth) Liverpool(% of 0.82 0.80 0.76 -2.71 -1.50 Population/% growth) Leeds(% of Population/% 0.74 0.75 0.75 5.87 3.46 growth) Source: National statistics, EuromonitorInternational Table 25 Population Density: 1995/2000/2002/2004/2006/2007 people per sq km 1995 2000 2002 2004 2006 2007 Population density 239.5 243.0 244.8 246.8 249.6 250.9 Average of CLIFE 239.8 260.7 266.8 270.9 279.1 282.3 countries Source: National statistics, EuromonitorInternational Table 26 Population Density (% growth): 1995-2007/2000-2007 Percentage points 1995-2007 2000-2007 Population density (people per sq km) 11.42 7.94 Average of CLIFE countries 42.51 21.68 Source: National statistics, EuromonitorInternational CONSUMERSEGMENTATION Babies and Infants The number of babies and infants in the UK declined slightly between 1995 and 2007, falling by 4.25% to reach fewer than 2.17 million in 2007. As a result, the proportion of the UK population accounted for by babies and infants declined from 3.91% to 3.57% over the period. According to a Bank of England study,the workforce

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