A report by the USwitch website has today cast a very different shadow on the UK consumer market to the one which has been hitting the headlines of late. It is reported that UK consumers, narrowed down to "shopaholics", have amassed a massive £24 billion debt during the ongoing economic troubles. There are around 4 million women and 3 million men defined as "shopaholics" by the survey, i.e. shoppers who have built up more than half of the unsecured debt through "fashion" purchases.
Over the last few days it has become more and more apparent that many households in the UK are struggling to maintain current income levels. Aside from the fact that wage inflation is something of a rarity in the UK it is the fact that UK retail inflation continues to remain uncomfortably high which is also beginning to affect the relative spending power of UK households.
Tesco has become the first UK supermarket company to test the "drive-through" theory in relation to consumer spending. The service was revealed today at the company's Tesco Extra store in Baldock, Hertfordshire. This comes only days after Tesco announced plans to open up a number of supermarkets across UK airports a move seen by many as the next phase of growth by the company.
The financial press has given much space to the potential problem for UK household income in the short to medium term as wage pressure continues and inflation remains uncomfortably high. Despite the fact that many inflationary measurements use the consumer price index, which is currently around 3.1%, a number of observers believe that the retail price index, currently approaching 4.8%, is perhaps a more realistic assessment of the situation for UK consumers. So what does this mean for UK household incomes?
A recent survey confirmed that more than 10% of grown up children are now directly financing a part of their parent's cost of living. As we mentioned in one of our earlier articles, many people are now struggling to make ends meet in their later years with the state pension falling in value in real terms for some time and the cost of living continuing to spiral higher and higher. However, short-term financial assistance for their parents may well be leaving some grown up children short for the future!
The award-winning Mitsubishi i MiEV electric vehicle will now be available with an additional £10,000 reduction from the original cost price. The vehicles will now retail at £28,990 although when you take into account the UK government's £5,000 green incentive this figure falls further to £23,990. There is no doubt that the Mitsubishi i MiEV is one of the most eagerly awaited electric cars to hit the market and the fact the company has agreed a further significant price cut can only help sales.
A number of reports over the last few days have suggested that UK consumers are now more interested in the Internet than ever have been before. A significant rise in online spending has cast a spotlight on the UK retail sector, both the off-line and the online arenas, which are performing very differently. There are growing concerns that a growing emphasis on the online arena will squeeze off-line companies and see many fall by the wayside over the next few years.
In a bizarre turnaround a report by Scottish Widows today has highlighted the fact that many parents are now struggling to survive financially and depending more and more upon their children. The report shows that in 2008 adult children gave around £6500 back to their parents who were struggling to make ends meet. However, the figure increased to £8250 in 2009 with 8% of adult children now helping to finance the living costs of their parents.
Online sales in the month of July increased by 1.1% compared to the figure for June, but jumped by a massive 18% compared to the corresponding period last year. In total the report by the Office for National Statistics shows that UK shoppers spent £5 billion online in July which was the largest year on year increase since 2007. So why are UK consumers suddenly finding favour with the online arena?
Difficult property markets, choppy times ahead for the UK economy, unemployment expected to rise, inflation still a major threat and the cost of living in the UK continues to rise, against this background more and more people are "burying their heads in the sand". The truth is that the UK economic downturn has, and continues to, effect every area of the UK population. Businesses are falling by the wayside on a daily basis, unemployment is expected to rise in the short to medium term and more and more people are now struggling to cover their everyday living costs.
