New study: consumers set to ‘spend not splurge’
New research has found that UK consumer sentiment is muted as shoppers say they are set to “spend not splurge” in the run-up to Christmas.
According to McKinsey & Company’s 2021 European Consumer Sentiment Survey, only 33% of UK shoppers plan to splurge before the end of the year compared to 47% who said they planned to do so back in February.
The research has also revealed that concerns over inventory in the UK are leading shoppers to change brands or retailers. Of the 51% of UK consumers who encountered a stock shortage recently, 33% said they had purchased the product at a different retailer. Furthermore, 31% admitted to buying a different brand or similar product at a different retailer, but only 11% waited for the product to be back in stock. In addition, 7% said they bought a different product at the same retailer and 18% did not buy anything. McKinsey found that value was the main reason behind brand switching.
McKinsey also looked at the effect of social media on shopping and found that 56% of festive purchases are expected to be influenced by it. Some 84% of Gen Z and 73% of millennials expect social media to have an impact on what they buy compared to 38% of Gen X and only 10% of baby boomers.
Eric Hazan, senior partner at McKinsey & Company, said: “Spend not splurge is this year’s holiday sentiment. Retailers will need to navigate product shortages to obtain their share of wallet, as consumers rarely wait for stock availability. Value is also a deciding factor, as consumers cite this as the main reason behind brand switching. The opportunity for retailers sits largely with social media, where holiday purchases can be influenced.”
