19/03/2009

New analysis published today by Experian®, the global information services company, suggests that perception and recessionary behaviours amongst UK consumers and businesses are helping to drive down the economy.

The Experian Insight Report draws on the company's consumer and business data insight to identify significant new trends emerging in the UK economy. The report suggests that consumer behaviour is out of synch with the real state of the economy - fuelled by a 'feel bad factor' based on perceived threats to personal and financial wellbeing. From the business perspective, fewer companies are starting up, in part due to a fear of failure and lack of confidence as raw business failures increase. However, Experian's analysis shows that while business failure rates have been rising since 2007, measured against the growth in the number of businesses, the failure rate has been flat for ten years and a focus on start-ups is needed to prevent an increase in the future.

The report's key insights reveal that:

The UK consumer landscape:

• Despite being the best placed to ride out a recession, some consumer groups with a high share of income generating assets are cutting back on spending the most.
• Although less than half of adults believe that their own personal finances will worsen over the next six months, 90 per cent have actually changed their financial behaviour and consumption habits already.
• Cut-backs on out-of-home entertainment and treats have already been made, and bigger purchases and lifestyle decisions are coming under the microscope. UK adults are delaying buying property (30%), cancelling plans to change jobs (27%) or delaying having children (23% of 23-25 year olds)
• Value for money is top of the consumer agenda and retailers perceived as discounters, including the supermarkets, will be the best-equipped to weather the retail storm.
• UK consumers have discovered a new appetite for discount vouchers, with online voucher searches up 143% and a host of new websites appearing to feed this demand.
• Brand loyalty is set to decline as 'empowered consumers' now look for better service and combine off-and-online shopping in search for a bargain to satisfy their 'fashionable thrift' mindset.