Britain’s High Streets are set to feel the latest effect of the global financial crisis – as the “grey pound” suffers an uncharacteristic squeeze.
As the country slides closer and closer to recession, the effects are now beginning to be felt by the man in the street and new research this week shows that even the normally robust 50+ consumer group is battening down the hatches.
There are now more than 21 million people over the age of 50 in the UK – a third of the population – they own 80% of the country’s wealth and have an annual disposable income estimated at £160 billion.
A nationwide YouGov survey, commissioned by Senioragency, specialists in marketing to the older consumers, shows growing concern and a readiness to cut back on spending in the next few months – pointing to a pretty lean Christmas at the tills.
In this first major poll of the senior market since the economic downturn, 82% are concerned about the oncoming recession and the state of the UK economy over the next couple of years.
Worryingly for already hard pressed retailers, 61% say they believe they will be directly affected by the recession and intend to curb their spending as a result. This compares with just 45% of the 18-24 age group.
The implications are clear – with a higher percentage of the biggest spending consumer group planning to cut back, the effects will be magnified right across the board.
However, while the 50+ group review their options and look likely to reduce their discretionary spending, just 40% of them are actually worried about making ends meet. This reflects the relatively low levels of mortgage and unsecured debt enjoyed by the older group. By contrast, 57% of the 35-44 age group are worried about making ends meet as they juggle household debt and raising families.
Dick Lumsden, Managing Director of Senioragency, said: “For the millions of over 50s who are still working, they are seeing the value of their pensions dropping and are worrying about job security and their long term future. Those who have retired are feeling the effects of inflation, so there is pressure all round on the amount this hugely influential consumer group is prepared to spend.
“Undoubtedly that will feed swiftly and directly through to the High Street as they cut back on non-essential purchases.
”For the less well off, the joint pressure of fuel, food and housing costs will affect everyday decisions such as where to shop, brand choice and the likely postponement of some clothing or household items.
“For others, fearing job security, and experiencing falling house and pension values, it will affect higher ticket items such as replacing the family car, holiday choice, or cutting back on eating out and entertainment.”
The Senioragency poll also showed that only just over one in ten thought the recession would be short lived (i.e. less than a year). More than 60% feel it more likely to affect them for between one and three years.
Lumsden said: “Some of these older consumers have lived through two or three recessions and have a very clear idea of what to expect. With many of them thinking this will be no short term dip, then brands and retailers will need to rethink their tactics if they are to remain competitive.
“As money becomes tight, choice becomes limited. Shops and products which offer added value, incentives or shrewd and targeted marketing will benefit. For others, there could be a deep and prolonged drop in custom.”
Ends
Note to Editors.
· Senioragency is a division of fully integrated London agency DCH. www.dch.co.uk
· YouGov is one of the UK’s leading research groups. www.yougov.co.uk
This research was conducted online among a group of 1,322 people in the UK aged 50 and above, and 1,227 aged under 50 as a comparative sample.
For further information contact:
Dick Lumsden on 020 7400 1270 or by email on dlumsden@senioragency.co.uk
