Brits ditch Gucci, Prada and Chanel for food and booze

The cost of living crisis has turned consumer spending on its head, with Brits now more likely to treat themselves to food and booze than fashion, as the battle for their hard-earned cash heats up.

Prompted by the news that 56% of consumers feel like they are worse off compared to a year ago [NielsenIQ], independent creative agency Impero surveyed 1,000 UK consumers to identify current shopping habits in relation to premium.

Those surveyed – through Impero’s cultural insights and research platform ‘The Move’ – had an average yearly spend of £671 on premium products. Millennials aged 35 to 44 were found to be the biggest spenders, with an average of £1,000 a year.

The study found that most spend their money on food (47%), alcohol (38%), holidays (36%), coffee (33%) and beauty (31%). Fashion is set to lose out, with 32% of consumers trading down to prioritise spending elsewhere.

Hype and scarcity are no longer attractive to premium consumers, with only 6% agreeing that these would be purchase drivers.

Instead, consumers – particularly younger generations (31%) – are buying affordable luxuries by opting for mid-range brands over traditional luxury. Nike, Samsung, British Airways, Clinique and John Lewis are popular choices for this new consumer mindset.

The research outlines ‘the new rules of premiumisation’:

Express yourself – Brands must use imagination and originality to design new rituals and occasions to reach undiscovered audiences.

Use values to prove value – Value is more than price deep, consumers are willing to spend in other ways such as through education or emotional investment.

Redefine to realign – Unlock new meaning by reimagining your brand for a new generation. Consumers increasingly allow brands to evolve and change their offering.

Functional dominance – The battle lines between luxury and premium lie in ‘elevated essentialism’. The consumer mindset is shifting from a luxury image towards what a product can offer in terms of functionality and convenience under its ‘premium’ claim.

Impero head of strategy Charlotte Willcocks said: “There is little research into what brands need to do now to maintain dominance in an ever-changing premium space which is why we wanted to publish the ‘new rules of premiumisation’.

“There is a lot of pressure for brands to show value, resulting in a race to the bottom in who can claim ‘value’ best with a stripped-down approach.

“However, the research shows there are a huge number of consumers still looking to trade up through everyday luxuries so there is a disconnect occurring. There is an opportunity for brands to meet the consumer demand.”