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24 May 2024

Sun-Kissed Spending: Consumer Trends This Summer 

As inflation tumbles, it looks like the light at the end of the tunnel is emerging. Understanding what people are thinking and how they’re spending is vital for businesses aiming for growth. Summer is a major season for many businesses and as people’s attitudes change, so does their spending behaviour. Let’s break down exactly what people are thinking, how you need to react and what effect the summer season will have on your revenue.  

Inside Your Customer’s Mind 

47%, that’s the number of those extremely concerned about the UK economy. This might look worrying; however, this is at its lowest point in 18 months. The latest reports show UK inflation sitting at 2.3%. This alone would go a long way in explaining what seems to be a positive shift in consumer spending. After a difficult 18 months, insights now indicate people are being freer with their finances and feeling more positive about their present and future circumstances. With interest rate cuts incoming, inflation continuously falling and a rapid launch from recession, people are beginning to feel the effects of a healthier economy. As this sets in and narratives change, significant changes in how consumers spend will likely occur. During times of economic difficulty, people think differently. Purchase decisions are organised into one of 4 categories: essentials, treats, postponables or expendables. If your products and services are deemed non-essential, you can quite easily be cut out. The focus for consumers is simply getting by and if you’re not a justifiable purchase, it can only go one way.  

Redefining Your Value 

Despite difficult conditions, people still want to have fun and little moments of pleasure in their lives. Consumers are financing treats by continuing to be frugal with what they spend on essentials to enable these non-essential spending opportunities. According to research by EY, more consumers (43%) are living in the moment rather than planning long-term than they were in October 2022. Our listener insights concur, in a recent survey, 5 million agreed “I tend to spend money without thinking”. From the onset of the pandemic, household budgets became tighter, leading to a shift to cheaper alternatives. Many businesses reacted to this to ensure their value proposition was clear and justified against cheaper alternatives. Now belts are loosening, and prices are falling, it is time to once again assess if your business is differentiated, distinctive and offering a clear unique selling proposition (USP).  

Seasonal Bonus  

It’s long been said that the weather affects how we spend. This isn’t unfounded, the research is there to support this narrative. The Journal of Retailing and Consumer Services shows that sunlight has a “massive effect” on consumers’ willingness to pay.* This research shows people aren’t just willing to spend when the weather is good, they’ll actually pay more for products. Additionally, pleasant weather drives demand across industries, particularly those with an outdoor element. School holidays are a major factor in driving this demand and as always, competition to cater for this demographic is fierce. The summer season is also the holiday season, and this seems to prevail, regardless of finances. 77% of consumers plan to go on holiday this year.  

  • 12 million Bauer Listeners, that’s 66% of our audience are planning to spend money going abroad.  
  • 45% of our listeners plan to holiday in the UK for their next holiday. 
  • 12.3 million Bauer Listeners, that’s 68% of our audience are planning to spend money improving their gardens.  
  • 11.6 million Bauer Listeners, that’s 64% of our audience are planning to spend money visiting Cultural Places and Attractions. 

Standing Out From the Crowd 

2024 is undoubtedly a year of enormous opportunity. The conditions are right for a return to pre-COVID conditions. Keeping your ear to the ground and close to consumers is fundamental to getting the messaging right. Understanding what makes you different, why you’re worthy of your price and how you compare to your competitors must all be communicated through your advertising.  

Having a clear perspective of the whole picture; many families are still struggling and will continue to do so.  

Engaging these demographics sensitively and adjusting your offering will allow you to cater to the whole market and drive your revenue as far as possible this year.  

SOURCE: UK retail spending grows despite cost-of-living crisis | EY UK 

TGI GB 2024 March. Listened in the last month. Surveyed vs national average.  

Bauer Insiders Spotlight on Travel 2024 

Office for National Statistics