What Does 2012 Have in Store for Consumers?

With many question marks over the economy and consumer behaviour in 2011, this year is exceptionally important for commerce.

The Office for Budget Responsibility has recently downgraded its 2012 growth forecast to 0.7% (down from 2.5%), and so how and where people spend their money has never been so important.


So how are consumers going to respond in 2012? The Bank of England forecasts that inflation is likely to fall in 2012, which would increase purchasing power. However, as individuals repay their debt this is likely to lower the level of spending as a proportion of income.

What is likely to change is the culture surrounding consumption. The excellent ‘Opportunity in Austerity’ paper by RAPP highlights that there is likely to be a shift away from frivolous spending towards carefully considered, savvy expenditure. The paper also points out that self-interest is still important and that consumers are redefining what in their life is a necessity or a luxury.

For example, investment in activities around the home is likely to grow, 57% of respondents have either invested in home entertainment, or intend to, because of the current economic climate.

With these changes in economic culture, consumers demand a good reason to part with their cash.


Paul Barnes
Media Analyst


Watch the video below for a great explanation on the credit crisis.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.