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Executive Summary The socio-economic base of the UK population has been changing slowly but steadily during the past decade (i.e. since the late 1990s), with the proportion of adults classified as C2s, Ds and Es declining (whereas ABs and C1s have been increasing in terms of their percentage of the total population).

There have been significant changes in the clothing market since the beginning of the current decade. The discount fashion sector has experienced a boom, with a number of retailers thriving as their appeal has expanded to encompass middle-class shoppers as well as their traditional C2DE consumer base. Major supermarket chains have also increased their presence in the clothing market.

Since the start of 2008, low consumer confidence has affected retail sales across the board. Increasing competition between the discount, supermarket, middle-market and designer clothing sectors — which are all attempting to attract the same groups of consumers — is likely to have even more marked effects during the second half of 2008.

Food inflation is a notable feature of the current economic climate. The prices of many basic food items — including bread, milk, butter, rice, cheese and meat — rose considerably during 2007 and the early part of 2008. This was due to a number of factors, including: increases in the price of crude oil; poor harvests throughout the world; demand for bio-fuels, which are produced from staple food commodities; and greater demand for processed foods from developing countries.

As at September 2008, the effects of price inflation in the UK food market have yet to make themselves felt completely with regard to changes in shopping habits, but it is likely that there will be an increase in the number of consumers shopping from supermarkets' value ranges, as well as growth in the usage of discount food retailers.

The growth in home ownership among C2DE consumers — which began during the early 1980s, when council tenants were given the right to buy their homes — has given them more incentive to spend time and money on their home surroundings, leading to an explosion of interest in `do-it-yourself' (DIY) home improvements.

However, the `credit crunch', and the consequent troubles in the housing market, are causing rapid changes. Falling house prices, combined with a tougher stance on the part of mortgage lenders, mean that homeowners are more vulnerable than they have been for many years; indeed, repossession orders are on the increase.

The rise of budget airlines, combined with widening Internet access, has revolutionised travel for many consumers: there has been a growth in independent booking of holidays, and of short-haul flights to Europe.

The UK budget hotel market has also experienced strong growth, working on a similar model to the budget airlines, with Internet booking being particularly important.

The `digital divide', i.e. the fact that C2DEs were slower than ABC1s to have access to the Internet, meant that travel habits for C2DEs changed more slowly during first half of this decade than they did for ABC1s. Although there has been an increase since 2005 in the proportion of C2DEs researching and booking their holidays on the Internet, this has been at a slower rate than among ABC1s.  
 

Executive Summary

1. Introduction

BACKGROUND AND REPORT COVERAGE

DEFINITION

Table 1: Descriptions of Social Grades by Social Status and Type of Occupation of the Household's Chief Income Earner

Table 2: National Statistics Socio-Economic Classification — Descriptions, Categories and Typical Occupations

2. Strategic Overview

SOCIO-ECONOMIC BACKGROUND

Table 3: The Adult Population of Great Britain by Social Grade (% of adults), 1998, 2000 and 2003-2007

Figure 1: The Adult Population of Great Britain by Social Grade (% of adults), 2007

Table 4: Demographic Profile of C2DE Adults Compared With Profile of All Adults (% of respondents), 2008

THE ECONOMY

Table 5: UK Rate of Inflation (%), 2003-2007

Table 6: Actual Number of Unemployed Persons in the UK (million), 2003-2007

HOME TENURE

Table 7: Profile of All Adults, ABC1 Adults and C2DE Adults by Home Tenure (% of respondents), 2008

CAR OWNERSHIP

Table 8: Car Ownership by Social Grade (% of adults), 2007

HOUSEHOLD EXPENDITURE

Table 9: Average Weekly Household Expenditure by Product/Service Category by Socio-Economic Classification of Household Reference Person (£), 2006

Table 10: Average Weekly Household Expenditure by Product/Service Category by Socio-Economic Classification of Household Reference Person (%), 2006

COMPUTER USAGE

Table 11: Home Computer Ownership and Type of Usage by Social Grade (% of adults), 2007

3. Food

BACKGROUND

CONSUMER TRENDS

Budget Versus Premium Food Ranges

Table 12: ABC1 and C2DE Purchasers of Supermarkets' Own-Brand Luxury and Value Ranges (% of respondents), 2008

Table 13: Purchasers of Premium Food Ranges by Social Grade and Frequency of Purchasing (% of adults), 2007

Table 14: Purchasers of Budget Food Ranges by Social Grade and Frequency of Purchasing (% of adults), 2007

MARKETING AND SUPPLIER ACTIVITY

ADVERTISING EXPENDITURE

Table 15: Main Media Advertising Expenditure on Food and Drink Products by Aldi and Lidl (£000), Years Ending June 2007 and 2008

4. Home

BACKGROUND

CONSUMER TRENDS

Table 16: ABC1 and C2DE Consumers' Attitudes and Behaviour Regarding Home Improvements and Decorating (% of respondents), 2008

Table 17: Undertaking of DIY Tasks at Home in the Past 12 Months by Social Grade (% of adults), 2007

Table 18: Penetration of Selected DIY Tasks by Social Grade (% of adults), 2007

MARKETING AND SUPPLIER ACTIVITY

ADVERTISING EXPENDITURE

Table 19: Main Media Advertising Expenditure by Selected Retailers of Furniture and Furnishings (£000), Years Ending June 2007 and 2008

5. Clothes

BACKGROUND

CONSUMER TRENDS

Table 20: Users of Leading Retailers For Purchases of Clothing and/or Footwear For Women and Girls by Social Grade (% of respondents), 2007

Table 21: Users of Leading Retailers For Purchases of Clothing and/or Footwear For Men and Boys by Social Grade (% of respondents), 2007

Table 22: Purchasing of Clothing From a Supermarket Within the Past 6 Months by Social Grade (% of respondents), 2007

MARKETING AND SUPPLIER ACTIVITY

ADVERTISING EXPENDITURE

Table 23: Main Media Advertising Expenditure on Clothing by Selected Discount Retailers and Supermarkets (£000), Years Ending June 2007 and 2008

6. Leisure and Travel

BACKGROUND

CONSUMER TRENDS

Pub Visiting

Table 24: Regular Users of Public Houses by Social Grade — Occasions and Purposes (% of respondents), 2007

Table 25: Changes Consumers Would Like to See in Public Houses by Social Grade (% of respondents), 2007

Holidays and Travel

Table 26: Those Who Have Taken at Least One Holiday or Short Break Away From Home in the Past 12 Months by Social Grade (% of adults), 2005 and 2007

Table 27: Holiday Destination and Type of Holiday For Last or Last-But-One Holiday by Social Grade (% of adults), 2007

Table 28: Sources of Information Used For Last or Last-But-One Holiday by Social Grade (% of adults), 2007

Table 29: How Holiday Was Booked For Last or Last-But-One Holiday by Social Grade (% of adults), 2007

Table 30: Booking Method Used For Last or Last-But-One Holiday by Social Grade (% of adults), 2007

Table 31: Use of the Internet For Finding Information, and as a Booking Method, For Last Holiday by Social Grade (% of adults), 2005 and 2007

MARKETING AND SUPPLIER ACTIVITY

ADVERTISING EXPENDITURE

Table 32: Main Media Advertising Expenditure by Selected UK Budget Hotel Chains (£000), Years Ending June 2007 and 2008

7. An International Perspective

EUROPE

THE US

8. PEST Analysis

POLITICAL FACTORS

ECONOMIC FACTORS

SOCIAL FACTORS

TECHNOLOGICAL FACTORS

9. The Consumer

OVERVIEW

Table 33: Summary of C2DE Consumers' Attitudes Towards Finance and Spending (% of C2DE respondents), November 2005 and April 2008

Financial Situation

Food

Home

Clothes

Holidays

FINANCIAL SITUATION

Table 34: C2DE Consumers' Financial Situation Compared With 2 Years Ago (% of C2DE respondents), April 2008

FOOD

Table 35: C2DE Consumers' Attitudes Towards Supermarkets' Luxury and Value Food Ranges (% of C2DE respondents), April 2008

HOME

Table 36: C2DE Consumers' Habits and Attitudes With Regard to Home Decorating (% of C2DE respondents), April 2008

Table 37: C2DE Consumers Who Are Worried About the Possibility of a Fall in House Prices (% of C2DE respondents), April 2008

CLOTHES

Table 38: C2DE Consumers' Attitudes Towards Buying Clothes From Discount Shops (% of C2DE respondents), April 2008

Table 39: C2DE Consumers Who Prefer to Buy Clothes From Independent Designer Shops (% of C2DE respondents), April 2008

Table 40: C2DE Consumers' Attitudes Towards the Wide Availability of Designer Labels (% of C2DE respondents), April 2008

HOLIDAYS

Table 41: C2DE Consumers' Attitudes Towards Holiday Destinations (% of C2DE respondents), April 2008

Table 42: C2DE Consumers' Attitudes Towards Booking Holiday Travel and Accommodation (% of C2DE respondents), April 2008

10. Company Profiles

INTRODUCTION

ALDI STORES LTD

Corporate Strategy

Advertising

Profitability

Table 43: Financial Results for Aldi Stores Ltd (£000 and %), Years Ending 31st December 2004-2006

Recent and Future Developments

ASDA GROUP LTD

Corporate Strategy

Advertising

Profitability

Table 44: Financial Results for ASDA Group Ltd (£000 and %), Years Ending 31st December 2004-2006

Recent and Future Developments

MATALAN LTD

Corporate Strategy

Advertising

Profitability

Table 45: Financial Results for Matalan Ltd (£000 and %), Years Ending 26th February 2005, 25th February 2006 and 24th February 2007, and 53 Weeks Ending 1st March 2008

Recent and Future Developments

NEW LOOK GROUP LTD

Corporate Strategy

Advertising

Profitability

Table 46: Financial Results for New Look Retailers Ltd (£000 and %), Years Ending 26th March 2005, 25th March 2006 and 24th March 2007

Recent and Future Developments

PRIMARK STORES LTD

Corporate Strategy

Advertising

Profitability

Table 47: Financial Results for Primark Stores Ltd (£000 and %), Years Ending 17th September 2005, 16th September 2006 and 15th September 2007

Recent and Future Developments

SOMERFIELD LTD

Corporate Strategy

Advertising

Profitability

Table 48: Financial Results for Somerfield Ltd (£000 and %), 53 Weeks Ending 30th April 2005, and Years Ending 29th April 2006 and 28th April 2007

Recent and Future Developments

TK MAXX

Corporate Strategy

Advertising

Profitability

Table 49: Financial Results for TK Maxx (£000 and %), Years Ending 29th January 2005, 28th January 2006 and 27th January 2007

Recent and Future Developments

11. The Future

THE ECONOMIC CLIMATE

C2DE Consumers' Reactions to Speculation About the Economy

Table 50: Expected Reactions to the Current Economic Speculation by Social Grade (% of respondents), 2008

Figure 2: Expected Reactions to the Current Economic Speculation by Social Grade (% of respondents), 2008

12. Further Sources

Publications

General Sources

Government Sources

Other Sources

Bisnode Sources