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How is Britain tightening its belt?

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Mark Easton | 16:45 UK time, Friday, 5 September 2008

Are you an ostrich or a vulture? A crash-dieter or a scrimper? With gloomy skies and lashing rain echoing the miserable economic forecasts, I took to wondering exactly how Britain is tightening its belted mackintosh.

According to M&C Saatchi (who, like all ad agencies, cannot resist classifying people) recession reveals a range of personalities.

An ostrich'Ostriches' refuse to change their behaviour. Young, carefree, they let the plastic take the strain.

'Vultures' sniff an opportunity - seeing bargains everywhere, they are ready to swoop.

'Crash-dieters' have stopped buying all luxuries and spend as little as possible on essentials.

'Scrimpers'? Well, apparently they went on holiday to Cornwall, rather than Corfu.

They've discovered Prosecco is just as nice as champagne (Waitrose sales of Italian bubbly up 56% I read). And their raincoat comes from Primark.

Today's BBC survey revealing the rising cost of groceries may act as a particular nudge to lovers of croissants and bolognese sauce (up 40%). Perhaps they will indulge their food fantasies on a packet of rusks topped with cheesy string (baby food and dairy down 1-2%).

Economics changes the way people behave. But how are Britons really responding to the current downturn? We are not buying that new car - figures today show sales at their lowest level for over 40 years. We are not saving - household savings put at their lowest level for 50 years.

The country is experiencing what's been dubbed the 'Aldi effect' as consumers head for the budget supermarkets. Aldi sales are up nearly 20%, Lidl up 12.3% while Tesco, Asda, Sainsbury's and Morrisons all report sharp growth in their discount lines. Organic produce has apparently suffered a hit with a survey for the Guardian suggesting spending has fallen from a peak of nearly £100m a month earlier this year to £81m in the most recent four-week period recorded. "The fall has been steepest in eggs, but is also reported in the most popular sectors, including dairy, fruit and vegetables and chicken" the paper reports.

We are eating out less - sales of ready-cooked meals are up as herds of 'STAGS' - Stay at Home Gourmets head for the food halls. The aprons are fastened, the plastic lid is peeled off the 'restaurant-quality' ready-meal and Cava is slurped as they micro the duck breast in raspberry jus.

Austerity has strange consequences. Sales of lipstick and perfume usually increase. L'Oréal and Estée Lauder both say that is what is happening now as women forego the frock but cheer themselves up with a lippy and scent.

Despite all that make-up and fragance, money worries tend to lower people's sex drive: the dip in the birth rate in 1976 is often put down to the recession of 1974. And people are less likely to get married (or divorced) during an economic downturn.

We are driving less, the roads seem emptier, buses busier, cycle lanes more crowded - the price of petrol seems to be having a direct impact on our behaviour. American motorists have cut something like 11 billion miles from their monthly driving with the US Department of Transportation calculating that the change has helped cut greenhouse gas emissions by an estimated 9 million metric tons for the first quarter of 2008.

For some, budgets were already so tight that a squeeze means real suffering. But I can't help feeling that for many, the downturn might act as a positive corrective. For those too young to remember what a recession feels like, belt-tightening may bring a new and healthy understanding of what "essentials" really are; a realisation that economies (as it says in the small-print) can go down as well as up - and we need to be able to adapt to both.

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  • 1. At 11:20pm on 05 Sep 2008, Joan Olivares wrote:

    The economic downturn has made me very careful about what I'm buying. I'm spoiled in that I only like to eat really fresh food so instead of switching to cheaper proteins, I just make smaller portions which isn't a bad thing in my case. If I'm making a salad for example, I cut one carrot into fourths. That way it feels like there's more carrot in the salad than there actually is. I also make my sauces and dressings from scratch because store bought sauces are ridiculously expensive. When Gordon Brown said to stop wasting food, I listened and realized I did waste a lot of vegetables. So now if I buy fruits and vegetables, I'll only buy about two at a time. In Hawaii, bananas are 1.27/lb. That's a crazy price to pay for something that grows wild here. So buying two at a time is my one person protest against this fabricated (organized crime) food crisis.

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  • 2. At 08:18am on 06 Sep 2008, badgercourage wrote:

    Mark

    As you imply, the purpose of these categorisations is to get journalists to write about the firm concerned.

    As you well know they have no basis in science, economics or politics.

    If anything they are unhelpful.

    1/10 not up to your usual high standard.

    Sucker!

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  • 3. At 11:29am on 06 Sep 2008, garry16 wrote:

    So, car sales have crashed, roads are emptier, greenhouse gas emission have fallen, the ridiculous housing bubble has burst, and the culture of "sod it, just use the plastic" to buy everything you cannot afford has at least had a big shock (though sadly is far from dead). I'd say this is the best thing that's happened for decades!

    I hope all the people with massive personal debts, and considering jumping onto the next housing bubble bandwagon will wake up and realise that they are doing nothing except helping the super rich to get richer, whilst making themselves poorer.

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  • 4. At 11:44am on 06 Sep 2008, brain_cell wrote:

    "'Scrimpers'? Well, apparently they went on holiday to Cornwall, rather than Corfu."

    So how do you categorise people who couldn't afford even a holiday in Cornwall? Or is this blog only for those for whom "recession" means nothing more than a slight and unwelcome tinkering with their already luxuriant lifestyles?

    Perhaps the media doesn't even bother discussing the lives of people with "real" problems? It reminds me a bit of those property programmes on TV, where some couple is agonising over which villa in the south of France they are going to buy with their 400 grand, and they're upset they can't afford the one for 500 grand. Oh, I feel their pain so acutely! What suffering!

    Having said that, I am relieved that the last paragraph of your article does seem to begin to acknowledge the problems of those who live in the real world - perhaps you could elaborate more on this theme...

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  • 5. At 4:14pm on 06 Sep 2008, miv_tucker wrote:

    Well, you're doing OK, aren't you, Mark? I never heard of a BBC employee, with a comfortable salary guaranteed out of the TV poll tax, going in want.

    Just what exactly ARE your qualifications for lecturing real working people, Mark, people whose jobs actually depend on some kind of real-world economic conditions, rather than being guaranteed by a forced tax on every TV-owning household?

    If you insist on patronising us lower orders, at least have the courtesy to do in in private.

    Thank you.

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  • 6. At 11:40am on 07 Sep 2008, Arquebuss wrote:

    What a very patronising post. I'm sure that living on your salary, paid for by us, that you'll be protected from the recession and able to carry on with your homilies.

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  • 7. At 12:04pm on 07 Sep 2008, stanilic wrote:

    Arquebuss in Post 6 has made a very valid point.

    For some people the current economic conditions are a reason to change their spending habits. This has an element of adventure and fun about it which is conveyed in the article. They at least have something to spend. Also it is not before time that the culture of waste that has pervaded this country since 2003 was killed off.

    For other people, those at the bottom of the pile, this is just Pelleon upon Ossa.

    Under New Labour a tax and benefit system has evolved that has trapped people into low pay and welfare dependency from which it is impossible to escape. If they get a second job to pay for the increases in food and fuel then they lose 70% of what they gain because their `benefits' are adjusted accordingly.

    The recession has just started. It is going to get a whole lot worse over the next six to nine months. By Christmas it won't be fun at all, it will be very serious for a lot of people.

    The very serious trouble is going to start when the government is finally forced to cut back on its bloated bureaucracy in both national and local government which is both unaffordable and unsustainable.

    Car boot futures are a buy.

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  • 8. At 2:34pm on 07 Sep 2008, brain_cell wrote:

    #6

    I am not quite certain whether post #6 from Arquebuss is a criticism of Mark Easton's article or my post (#4).

    If the latter is true, then I would like to point out that I am not living on benefit, but am actually working - therefore not a burden to you or anyone else (since I pay far too much tax). I reckon I probably would be better off on benefits, quite frankly.

    What irritates me is the way some in the media talk about "recession", "tightening your belts" and "feeling the pinch" etc, but they are speaking about people for whom the word "recession" in reality means next to nothing. This is a mockery of those who are working hard, are not sponging off the state, and yet are struggling to make ends meet (as a result of working in an industry which may be necessary to the economy, but not particularly lucrative).

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  • 9. At 5:40pm on 07 Sep 2008, busby2 wrote:

    Mark Easton

    Alan Hornby the head of HBOS said we cannot expect a recovery in the housing market until there is a recovery in the US housing market because only then would the US wholesale money markets on which we had come to depend would recover.

    But Alan Hornby failed to acknowledge that it was the existence of the wholesale money market that created the crisis of boom and bust in the first place!

    House prices for the first 10 years of this Govt raced ahead of inflation. This was funded by the wholesale money markets making cheap credit available to all and many people were encouraged to jump on the bandwagon before it was too late and they could no longer afford to buy a property.

    Gordon Brown was forever saying that his management of the economy meant an end to the years of boom and bust. How I hope those words will come back to haunt him and his miserable, hopeless paridy of a Government!

    The Govt is entirely responsible for allowing the boom and bust in the hosuing market as they failed to provide the means to regulate the flow of credit to prevent an unsustainable boom developing in the first place.



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  • 10. At 7:19pm on 07 Sep 2008, Arquebuss wrote:

    I was certainly not criticizing the post by brain_cell.
    Rather that of Mark Easton. It may be fun for you Mark to have an adventure in cost cutting but it certainly isn't for those on an extremely low budget. But then, what would you know about it? You sound like Polly Toynbee, always lecturing from the Olympian heights in which you reside but having no experience of the real world and telling those worse off than you how they should conduct themselves.

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  • 11. At 9:30pm on 07 Sep 2008, HappyUK07 wrote:

    This comment was removed because the moderators found it broke the House Rules.

  • 12. At 09:30am on 08 Sep 2008, herbmanbob wrote:

    Lol i was broke before this now im realy broke :|

    from beef to beefburger well if i ate beef it would be..

    Now looks around for a 2nd income hmmm no jobs....

    Maybe i should invest in some grow lamps :)

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  • 13. At 5:51pm on 08 Sep 2008, aviewerbham wrote:

    Like some of the other posters, it is people who were struggling even during the "good times" I worry about.

    It's all very well moaning you've had to switch from Sainsbury's to Aldi - what about people who were shopping at Aldi from the beginning? Where do they go? Aldi prices may seem fabulously cheap if you're used to Sainsbury's but they are still higher than they used to be - to people who always shopped there, they seem more expensive.

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  • 14. At 7:44pm on 10 Sep 2008, jimbogregs wrote:

    The chat above reminds me of the "eeee, you were lucky" Monty Python sketch.

    What a bunch of whingers and whiners everyone is these days. Times are slightly tougher than before but we're basically all incredibly lucky to have all that we have.

    A quick look at the hardships others suffer in the rest of the world makes all the handwringing about having to shop at Aldi (whatever that is) seem trivial in the extreme.

    As post 3 pointed out, a lot of it seems like good news to me.

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  • 15. At 02:12am on 11 Sep 2008, Mel0dymaker wrote:

    What are you going to call the jobless and homeless (when it REALLY kicks in) ? It's profound ignorance to label people on the basis of the reasoning in your article...

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  • 16. At 08:23am on 11 Sep 2008, John1948 wrote:

    The reality that recession hits different people in different ways.

    There are those who are in reasonably secure jobs, who did not stretch their finances when they were buying their homes and have relatively small personal debts. These people will just be more cautious and live more modestly. I suspect that these form the majority of the population. They won't be happy, but they can live with it.

    There are those who got heavily into debt or who made unrealistic commitments who are in real difficulty. Well, tough I don't see why anyone should be too concerned about a profligate attitude. If you haven't got the money, don't spend it.

    There are those who have been battered by circumstances beyond their control - illness, redundancy, a self employed gardener. They will suffer and beyond that their self esteem could be damaged. I really worry about them.

    There are the low paid. Again they will have to adjust their budgets, it will be tough but with direct help especially for housing costs they should will be OK.

    Below that are those living on benefits. What I do not know is how efficiently they are using their limited resources. The benfits are worked out, I assume, by what some Civil Servant thinks will be sufficient. The majority of people do not have all the information advantages of a Civil Servant who knows what grants are available, best costs of things and all the other things that help us spend money wisely. The big talk is about fuel efficiency, but I think that help to improve money efficiency would be useful. At the moment, lots of people below the poverty line are not 'wasting' money but realistic help in managing their budgets would certainly help.

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  • 17. At 4:39pm on 12 Sep 2008, Ironbath wrote:

    I for one have stopped drinking Champagne on weekdays. Afterall everyone has to do their bit, however hard the sacrifices are.

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