23 March 2009

Holidays still on agenda despite 20% drop in disposable incomes

People are cutting back on nights out and buying new clothes in rather than giving up this year’s holiday.

A new study has found that 42% of UK consumers seeing their disposable incomes drop by 20% in the past year

But the first things to go are not high-priced, one-off items such as holidays, but smaller luxuries including CDs and DVDs as well as trips to the cinema.

New research by ecommerce specialist Avail Intelligence shows that the impact of the recession has led to a significant change in spending habits.

More than half (59%) of people are cutting back on what they spend on fashion as well as nights out (41%).

In contrast, those that are spending are being more careful and switching from the high street to online, with 38% of people now preferring to shop via websites.

Nearly a third of those questioned said that they found user reviews and personal recommendations integral to shopping online, while convenience (73%) and value for money (43%) were cited as the main reasons for turning to the internet.

Company founder and CEO Pontus Kristiansson said: "While it is clear that consumers are feeling the effects of the recession, they are unwilling to give up their summer holidays just yet.

"While they are generally considering purchases more carefully, retailers have a clear window of opportunity to attract new customers on the look out for a better deal than they can get on the high street.

"The key to success will be providing online shoppers with the most relevant experience to them, personalising each and every journey to maximise sales opportunities."

by Phil Davies