March 27th, 2022, Hoang Nguyen
Against the backdrop of rising inflation and Russia’s invasion of Ukraine, UK consumer confidence fell by 2.4 points last month, according to a YouGov/Cebr survey. The energy crisis was compounded by the conflict in Europe, creating uncertainty over supply of oil and gas.
Read what Brits have to say about brands getting involved in the Ukranian crisis
While the Ukraine conflict may have pushed up prices recently, the cost of living crisis has been escalating for several months prior to the invasion. New data from YouGov reveals consumers in the UK say they have been shouldering rising costs since March 2020.
Household & energy
We polled 2,188 UK adults on how their spending habits have changed across 18 categories since before the pandemic and most say they are spending more money on household fuel now (63%). Just over a fifth (22%) of respondents say they spend the same amount on energy costs now, compared to before the pandemic, and even fewer say they have spent less in this category (4%).
A plurality (35%) of people say they are also spending more money on petrol compared to before the pandemic. Aside from 18-24s (28%), at least a third or more of each age cohort say they spend more on automotive fuel. Those who are not spending more will be able to do so thanks partly to changing working patterns and reduced mileage.
General retail
Groceries come in as the category second most likely to have affected the pockets of consumers – 58% report spending more here. Those aged 35-44—who are the most likely to be parents of young children—are significantly more likely to be spending more on food items and household goods (64%).
Some spending changes may be more of a result of pandemic-related disruptions, making categories such as online retail central to how people shopped for items like groceries. Roughly two in five consumers (42%) say they are spending more now on online purchases, rising to 51% among 25-34s.
More than half of UK adults also report either having maintained or increased their spending in retail categories such as take-out (59%), alcoholic drinks (58%) and apparel/clothing (56%).
The hospitality sector, meanwhile, has been hard by the pandemic and almost half (49%) of UK consumers are even now spending less on eating out than before COVID arrived.
Media & telecommunications services
One in five consumers (20%) report they spend more on video streaming subscriptions now compared to before the pandemic. A further 45% say they have maintained spending in the category, reinforcing the value streamed content provided as entertainment and distraction for consumers over the last two years. That’s unlikely to change too, with most global consumers who streamed content over the last year saying they will continue to do so at the same rate in 2022.
For more insights into which media behaviours will stick around and which will grow this year, download YouGov’s Global Media Report 2022
COVID-19 also brought disruptions to work life forcing many to conduct business remotely or in places around their house. Internet connectivity at home became increasingly important and since the pandemic began, roughly a fifth of UK consumers say they spend more on broadband services (18%). A majority say they have maintained their spending (65%) and few say they have cut back on this.
This brings up a point of what’s considered ”essential" to living in a post-pandemic world. Telecommunications services enable people to work from home, stay in touch with one another and buy the things they need online. Perceptions toward these services may have been elevated in the eyes of consumers today.
This idea, coupled with price increases throughout the last year as providers combat business costs and inflation rates, may explain why more than one in 10 consumers say they spend more on mobile phone contracts (13%) and handsets (12%) today.
Travel
Domestic travel saw an 18% increase in spending compared to before the pandemic and a quarter of consumers even indicate they have maintained their spending level on local travel (25%). A large share of people say they are spending less (33%), however, and a fifth say they have not spent any money on domestic holidays (22%).
Looking forward, there’s reason to expect a rebound for domestic and international tourism in 2022. According to March data from YouGov Global Travel Profiles—which measures traveller sentiment and brand perceptions on a daily basis—52% of UK adults say they will take a domestic trip in the next 12 months and 43% say the same about going on an international holiday.
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