London, 20 July 2023: As over 40% of British businesses report customers are spending less, new data shows that rising numbers of the UK population are choosing to work and shop from home to make every penny count as the cost-of-living crisis continues.
These insights mark the launch of the second Virgin Media O2 Business Movers Index – a quarterly barometer that combines anonymised and aggregated UK movement data from O2 Motion, with national polling findings to reveal key trends relating to the behaviour of 2,000 British businesses and 1,000 UK consumers. Together, the data paints a picture of movement patterns and the trends behind them. The second quarter of this year reveals a more cash-conscious image of Britain as more of the UK public change their behaviours to cope with a tough economic backdrop.
High street suffers as savvy shoppers spend less and hunt for best deals online
Amid ongoing inflation and rising costs, people are feeling the pinch with over half (54%) of businesses that noticed changes in spending reporting that their customers are spending less than they were in the first three months of the year (compared with 19% who reported higher spending). Over-65s are leading this trend with 1% spending more on clothing vs 41% spending less in the last three months. Looking at monthly growth figures it’s clear that older groups led retail growth at the start of the year, but this trend was reversed in Spring with a surge in 18-24 year-old shopping trips. The high growth in retail trips by 18-24 year-olds in May (11.8%), compared to no growth for people aged 65+, suggests younger Brits responded to the May bank holidays with increased retail and leisure activity – from summer holiday shopping to festival preparation.
Many cash-strapped shoppers are turning to second-hand to seek out better prices, with more than two-fifths (44%) of the public having shopped second-hand once or more in the last month. The majority (62%) of 18-34 year-olds are actively shopping second-hand as Gen Z take the mantle as the UK’s most sustainable shoppers.
Consumers are clearly being more budget-conscious (44%) now than three months ago, as spending on non-essential items plummeted in Q2 – including 45% spending less on electronics and 39% less on clothing. Food is the only item that Brits are buying more of (28%), with only 13% of the public buying less food than they were in the previous 3 months. Meanwhile, nearly a quarter (24%) of businesses have reduced staff as shoppers prioritise online deals over in-store shopping and half of businesses cite a surge in online shopping in Q2.
Heatwaves and pricey travel keep commuters at home
Commuting numbers have dropped significantly in the second quarter of 2023, with only a quarter of workers (24%) commuting more than they were three months ago, down from two-fifths (40%) in Q1, indicating a significant seasonal rebalancing towards working from home across the UK. The highest quarterly commute growth was in Edinburgh (4.6%), followed by London (2.8%) and Newcastle (1.6%) – these were the only three locations to experience growth in the cities considered in this analysis – while the biggest decline in commuting occurred in Cambridge (-3.2%) and Glasgow (-2.3%).
Well over half of commuters (62%) cited travel costs as a more important issue, rising to two-thirds for Londoners (66%). Despite the lure of office air conditioning, recent heatwaves have had workers avoiding the office with one in three (33%) respondents admitted to working from home more frequently to ‘hide from the heat’. Another significant factor impacting commuters is environmental concerns, with a significant number (37%) citing these as a more important issue compared to three months ago. Welsh commuters top the charts as the most climate-conscious commuters with 62% picking how they travel based on the environmental impact.
With many employers supporting Brits with the adoption of hybrid working policies, only 7% of businesses reported remote working had decreased employee productivity, compared with 12% in the first edition of the Movers Index. Over half of businesses (55%) that adopted more hybrid-focused working policies in the last three months did so to keep up with competitors and 58% of British businesses reporting adopting new tech and tools to facilitate this hybrid working.
For those commuting in, Wednesday remained the most popular day to travel to the office, with 78% of commuters heading to the office on this day.
Festivals and staycations keep Brits entertained despite tight purse strings
With Brits under financial strain, more chose to take advantage of the warmer weather in the UK by staying close to home for the start of the summer. In the past 3 months, over a third (37%) of Brits opted for a UK staycation compared to just 16% who headed abroad. With festival season upon us, it’s no surprise that two-thirds (66%) of 18-24 year-olds went to a festival in the past three months. Over half (52%) of festival-goers relied on public transport to reach the likes of Glastonbury and other music-filled destinations, with businesses are already feeling the impact. Almost three quarters (72%) of organisations surveyed reported seeing some impact of Brits flocking to festivals, including 38% of impacted businesses saying that their sales and revenues increased.
Despite ongoing strike action, Brits are continuing to rely on public transport, with one in five (22%) revealing they’ve increased their use of public transport for non-work travel in the past three months – with cost considerations (48%) and environmental considerations (35%) two key reasons given for this uptick. In terms of age group, 18-24 year-olds increased their use of public transport the most (38%) and Manchester received the highest share of young visitors for the first half of the year at over a third (36%) of all visitors to the city. Survey data showed that the bus was the most popular mode of transport for non-work travel in the past month, with 25-34 year-olds proving the biggest advocates (59%). Meanwhile, those in the South East of the country are the most likely to pound the pavements, with almost half (47%) preferring to walk over other forms of transport.
Jo Bertram, Managing Director of Virgin Media O2 Business, said: “With ongoing pressures from inflation and the cost-of-living crisis, both the UK public and businesses are adjusting their behaviours in response. Our second Virgin Media O2 Business Movers Index shows that resourceful Brits are opting for cost-effective ways to enjoy the summer, taking advantage of staycations and online shopping for deals – a trend that was starting to emerge in the first quarter of this year. People are also finding other ways to save money like commuting less, with the number of workers staying home for more of the week increasing as businesses continue to invest in hybrid working tech.
At a time when the macro-economic backdrop is forcing changed behaviours and efficiencies, reliable and accessible data is more important than ever to support businesses of all sizes in making more informed decisions with a better understanding of customer concerns and external trends.”
The Virgin Media O2 Business Movers Index is a publicly available quarterly report that explores the latest UK movement insights from each quarter.
*Data insights from O2 Motion never allow identification or mapping of individuals and operate within strict privacy guidelines. O2 Motion does not capture international visitors in the UK or children.
Notes to Editor: