Thursday, November 21, 2019
Recession and Consumer Spending Habits in the Clothing Indusrty Essay
Recession and Consumer Spending Habits in the Clothing Indusrty - Essay Example They also spend in different ways due to the recession. As borrowing becomes harder, consumers are more likely to make spending sacrifices. Ã¢â¬Å"People are clearly starting to get a sense that things are not as easy financially as they once were,Ã¢â¬ said Peter Ayton, Chief Statistician at Mintel. Recession not only affects how much consumers have to spend, but also how they behave. This project investigates changes in womens spending habits and examines how they will change in the future. The project considers a number of essential questions. Will womens spending behavior change when the recession ends? Or will they revert back to their old spending habits? Will consumption be back to the same level as years past? Will women spend less, delay purchases or trade down to cheaper alternatives? Economic recession can be defined as a significant decline in economic activity lasting more than a few months (NBER, 2009). The United Kingdom has been in recession since July 2008. This was prompted by many problems, including: The increased levels of unemployment and high levels of personal debt, mean consumers are feeling the squeeze. During recession itÃ¢â¬â¢s a normal propensity of consumers to cut down on spending and save money. The decline in consumers spending is due to decline in consumer confidence levels. The decline in confidence levels may be caused by unemployment or a financial crisis. Therefore, businesses are forced to lower their prices to attract consumers. When prices decrease, consumer spending capacity increases. In terms of profit and human capital, the recession has negatively impacted many industries. Prominent among the industries hit by the recession is the clothing industry. The UK retail clothing & footwear market was worth an estimated Ã £48.55bn in 2007 (Clothing HYPERLINK "http://www.researchandmarkets.com/reports/594454"&HYPERLINK "http://www.researchandmarkets.com/reports/594454"