7 minute read 4 Nov 2020
Man holding a coffee cup, using a laptop on a bedside table

Future Consumer Index: Why retailers must act now to capture the UK’s 'considered Christmas'

Mona Bitar

UK&I Consumer Leader, Ernst & Young LLP

Experienced business advisor for over 25 years. Amateur poet and historian. Brings multi-cultural perspectives as a proud Palestinian Brit.

Silvia Rindone

EY UK&I Retail Leader

Strategic mind with a pragmatic spin. Intellectually curious. Mother of two. Passion for art, food and travel.

7 minute read 4 Nov 2020

As more UK consumers embrace e-commerce, the EY Future Consumer Index on behaviour and sentiment identifies the scale of the pivot to online shopping.

By tracking consumer sentiment since April, we have seen consumer behaviour evolve from anxious to adapting. Consumers are proceeding with caution and considered purchasing behaviour. Nearly three-quarters (71%) of UK consumers are concerned about their finances and almost half (47%) say they will spend less this December than last year.

As we enter the critical ‘golden quarter’ of 2020, retailers face a peak Christmas selling period like no other before. To maximise their opportunities, retailers need a thorough understanding of how consumers are making changes to their lives as a result of the pandemic, and the actions they must take in response. 

Retailers must note that, while the UK consumer remains reluctant to spend, there is still demand. Whilst almost two thirds (62%) of UK consumers are unlikely to participate in Black Friday this year, retailers can still engage their customers. How they perform online over the next few weeks will be more important than ever.

Primarily, retailers will need to do the following:

  1. Fully understand consumer sentiment and propensity to spend
  2. Improve the online experience even further, addressing gaps or weaknesses
  3. Ensure agility to enable fast responses to short, medium- and long-term behaviour changes

UK consumers are adapting: sentiment impacted by second wave fears

In the last  EY Future Consumer Index in July, we saw that although consumer confidence was beginning to increase, nerves remained. It is a similar story this month. With data compiled between late September and early October, we start to see the impact of a second wave of the pandemic on consumer assuredness.

We have ranked UK consumers into four categories to analyse their current behaviour - the largest of which is the ‘struggling and worried’ (36%). This is followed closely by 32% who are ‘OK but adapting’. Both these segments are higher in the UK than globally, where the measure is 30% for each. In the UK, nearly a quarter (23%) are ‘unaffected and unconcerned’ and only 9% fall into the ‘hard hit but optimistic’ segment.  

UK consumers


will spend less this December festive season compared to last year.

Four segments describe the UK consumer

Boost to confidence in eating out still evident...

UK consumer confidence in everyday activities is generally holding steady. For example, those shopping in a grocery store rose slightly to 58% in October compared with 56% in July. The only exception is eating in a restaurant. Here, comfort levels have risen dramatically - up to 42% compared with 27% previously. It is likely that this is the result of the UK Government’s 'Eat Out to Help Out' scheme in August and that, although now ended, comfort levels remained.

...but a considered Christmas looms.

However, retailers are going to have to work harder than ever to capture a reluctant consumer spend. Almost half (47%) of UK consumers expect to spend less over December compared with the previous year. It looks like this will be a considered Christmas rather than a frivolous festive affair.

UK consumers at all income levels have suffered some financial loss because of the COVID-19 pandemic, and most are cutting their cloth accordingly. More than 50% of high and middle-income consumers are conscious of their spending and trying to save more. However, the lasting impact appears to be stronger on UK consumers with a lower income.

Big shopping or sales events, such as Black Friday, have traditionally driven footfall. But this year, nearly two-thirds (62%) of UK consumers (compared with 46% globally) say they will not be participating. They are also less likely (58% of UK consumers) than the global average (72%) to hold off on making purchases until such events. 

Imposition of the new Tier 4 lockdown restrictions in England mean the excitement of the instore Black Friday experience will be lost this year. Getting online right will be critical for retailers. But this means very different things for different consumer segments, and across different product categories. For instance, over half (56%) of 'struggling and worried' UK consumers are likely to use smartphones or tablets to browse and purchase clothing, fashion or technology. However, more than two-thirds (68%) of the comparatively older and financially better off 'unaffected and unconcerned' UK consumer segment use laptop or desktop computers for browsing and shopping the same product categories. Retailers need to ensure their online offer is ‘fit’ for the different digital channels used by their customers.

UK consumers


will not participate in the next big shopping or sales event.

UK consumers


will spend less during the next big shopping or sales event.

UK consumers show preference for online shopping across all product categories. 37% of UK consumers think the way they shop will change in the long-term and 40% say they will shop more online for products they previously bought in-store.

It is obvious that channels have already shifted, and this Christmas the trend will be further highlighted as consumers turn to the convenience and relative safety of shopping online over the in-store experience.

Across the board, UK consumers are far more likely to shop online for both essential and discretionary categories than those in the US, Germany, France and across the globe. Again, this could be because the market is more established and so the shift for consumers is more natural. However, the willingness to do so varies dramatically across different categories. In technology, 64% of UK consumers see online as their primary purchasing channel. In grocery, 30% of UK consumers are currently ordering groceries online more frequently and 44% are spending more (than before the pandemic) on delivery services.

Read the latest global EY Future Consumer Index for regional insights.

Consumers in the UK are far more likely to shop online for both essential and discretionary categories than those elsewhere

% of UK consumers that will shop primarily online for each product category in the future

percentage of people shopping online

But the product categories where consumers are looking to go online, are also the categories where consumers are most demanding of service, and to touch and feel products. This offers huge opportunities for those retailers that can embrace such needs and get the experience right for their customers. Our Index found that 48% of UK technology consumers are looking for feedback or advice from sales staff before they buy - a similar number (49%) want to touch and feel the product before purchasing. Meanwhile, in clothing, shoes and accessories, customers prioritise touching and feeling a product, with 67% of UK customers wanting to handle a product but only 28% wanting sales advice before buying.

Retailers cannot ignore this behaviour. If they fail to address this need through true omnichannel capabilities, they risk losing customers to showrooming - where their stores are used to view a product that the customer then buys elsewhere because of improved convenience or price.

Now is the time to reinvent retail

As we go into this holiday period, the mood of UK consumers is subdued. They are cautious and considered, reducing wasteful spend and preferring value over big sales events. What does this mean for UK retailers?

In the short-term, retailers need to review their marketing strategies to ensure they can maximise the opportunities of what could be a dramatic reduction in spending. Online campaigns and capacity need to be maximised; and the technological and fulfilment infrastructure necessary to manage a dramatic increase in online purchasing needs to be reinforced.

 In the longer term, the online experience needs to be enriched with easy access to expert advice so that retailers can replicate the in-store benefits of physical engagement with both products and staff. Fashion retailers, for example, have started to respond to this trend with online stylist advice. Categories such as technology have an even greater opportunity to engage their customers through tactics such as video calls with consumers to help them choose the right product.

To ensure the customer is not lost to a slicker experience elsewhere, physical retailers need to ensure they have: a well-thought-out product range; the option of expert, instore advice (perhaps with appointment bookings); and the ability to convert and seamlessly fulfil demand that best suits the customer - either through immediate pick up in store, same day collection, or delivery to home.

Retailers must also focus on building the organisational agility to pivot their offer and channel mix to the changing consumer. Are they reacting to customer needs? Have they taken cost and complexity from stores and truly simplified to focus on what the customer wants? Have they maximised their capabilities online?

Retailers cannot afford to stay still in this constantly changing consumer market. What would have been a 10-year transition has happened in less than a year, and retailers need to act now with agility and focus. Doing so now will maximise their chances of thriving into Black Friday and Christmas and taking advantage of future growth opportunities as we head into 2021.

  • Methodology

    We surveyed 14,467 consumers across the US, Canada, Brazil, the UK, France, Italy, Germany, Spain, Denmark, Sweden, Finland, Norway, India, the UAE, Saudi Arabia, China, Indonesia, Japan, Australia and New Zealand during the week of 29 September through 5 October 2020. Of those, this article focuses on 1,002 UK respondents. The survey questionnaire covered current behaviours, sentiment and intent between 28 September to 5 October, 2020.


As the end of the year approaches, the latest EY Future Consumer Index illustrates how UK consumers continue to feel cautious about spending. With the move to a considered Christmas likely, we identify the key areas retailers must address to make the most of a peak period unlike anything seen before.

About this article

Mona Bitar

UK&I Consumer Leader, Ernst & Young LLP

Experienced business advisor for over 25 years. Amateur poet and historian. Brings multi-cultural perspectives as a proud Palestinian Brit.

Silvia Rindone

EY UK&I Retail Leader

Strategic mind with a pragmatic spin. Intellectually curious. Mother of two. Passion for art, food and travel.