Consumers made wary by end of Eighties boom

THE CRASHED spending boom of the late 1980s has led to a change in consumer psychology which is likely to persist throughout the 1990s, according to research published yesterday.

For the rest of the decade consumers will be 'cautious, canny and wary', says Mintel, the market research organisation. They will be seeking long-term reliability in what they buy, rather than bothering about image and the gratification of immediate need, and will be watchful for further financial disaster.

Many people, particularly those whose mortgages are worth more than their houses, have been 'burnt quite badly', according to Bill Patterson, a senior analyst at Mintel. It could be eight to 10 years before they emerge from the burden of multiple debt. 'It will take quite a long time for the memories of the worry and concern to be lost,' he added.

The British consumer is going through a period of 'retrenchment', Mintel's annual lifestyle report concludes. The proportion of income saved, which reached a record low point in 1987, was two-and-a-half times greater last year and is still growing, although the rate of increase has slowed.

Sickness and accident insurance was the market sector showing the fastest growth over the last 10 years, up by 520 per cent, the report shows. The next fastest growing markets were life assurance and pensions.

Despite lower interest rates and a depressed housing market, a greater proportion of income was spent on housing last year than in 1982 - the increase, 1.1 per cent, was second in the growth league table of consumer spending after insurance and pensions. Medical and educational fees were third, at 0.8 per cent.

Other spending areas which have significantly grown over the decade include household service and household and garden products. Mr Patterson said this reflected an 'increased emphasis on home, health and security'. Many people were 'preparing themselves for additional financial disaster'.

However, the report says consumers may start spending again once they have built up their savings and suggests that the first green shoots of a recovery of spending may be surfacing. Mintel's consumer confidence survey of 1,000 people indicates that they were slightly less inclined to hold back on purchases last month compared with January 1992.

It also says that shopping has now replaced going to the pub as the most popular leisure activity outside the home. Last year, for the first time, more people - 33 per cent - said they had shopped for pleasure in the previous week than had visited the pub (29 per cent).

While pub-going has dropped in popularity by 8 per cent since 1985, eating out has increased 11 per cent and attending the cinema, theatre or a concert has risen by 5 per cent. But there has been a 12 per cent drop in reading books.

The British Consumer 1993; Mintel, 18-19 Long Lane, London EC1A 9HE, pounds 895.

------------------------------------------------------------------------ PARTICIPATION IN LEISURE ACTIVITIES, IN AND OUT OF HOME, 1985-92 ------------------------------------------------------------------------ 1985 1986 1988 1990 1991 1992 % point % % % % % % change 1985-92 In-home Reading magazines/papers 64 59 53 51 58 67 +3 Reading books 64 59 53 44 48 52 -12 Entertaining at home 31 31 21 33 34 34 +3 Out of home Visit pub for a drink 37 35 27 30 31 29 -8 Shopping for pleasure na na 21 25 28 33 na Eating out 19 22 16 30 28 30 +11 Dance/disco 9 8 7 9 11 11 +2 Visit club/wine/cocktail bar na na 6 6 8 9 na Visit cinema/theatre/ concert/ballet/opera 6 6 6 8 9 11 +5 Visit nature reserve/ park/countryside na na 9 15 15 9 na Gambling 5 4 4 8 8 9 +4 Visit art gallery/ museum/stately home 5 4 3 4 4 6 +1 Visit funfair/zoo/circus na na 4 6 5 2 na ------------------------------------------------------------------------ Base: adults - 1985-90, 1,500; 1991, 1,629; 1992, 1,121 ------------------------------------------------------------------------ Source: BMRB/Mintel -----------------------------------------------------------------