The 2008-09 Great Recession was a defining experience for Millennials, who came of age in a deeply troubled financial climate. While many since then have devoted a lot of time and energy into recovering from the experience and building their financial confidence, the scars of this have continued to haunt Millennials: 48% currently view money as a key factor in success, while 45% of Millennials say that their financial stability is one of their leading causes of anxiety.

Having already entered into the job market at somewhat of a disadvantage, only to face the current pandemic a decade later, Millennials’ financial stability has been highly shaken with many furloughed or out of a job. This could now lead to many adopting a more conservative mind-set in their spending habits and re-evaluating their purchase priorities.

With Millennials forced to tighten their belts, price-conscious habits are becoming a lasting trend. Money-stretched consumers are seeking out more value-oriented options and factoring essentials into their budgets. From cutting back on different luxuries to even simple things like cooking at home and not eating out, Millennials adjusting their spending values and habits could threaten profits across different categories.

As more Millennials spend time at home and make up the largest pool of current potential homeowners, there are some opportunities for brands to engage with that age group on mortgage advice, property developers, environmentally friendly homeware and furnishing products, outdoors homeware and home office furniture.

Key issues covered in this Report

  • The impact of COVID-19 on Millennials’ behaviours and attitudes.

  • The intensified focus on health.

  • The gap of financial stability that Millennials face.

  • Changes in spending habits in different categories.

  • The importance of the diversity and inclusivity movement to Millennials.

  • The opportunities for homeware and home accessories brands.

COVID-19: market context

The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. Rapidly rising case numbers led to the first national lockdown, starting on 23 March. It wasn’t until 15 June that non-essential stores were allowed to reopen, followed by pubs, restaurants, hotels and hairdressers on 4 July and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a month-long lockdown from 5 November and Scotland introducing a new five-level system of coronavirus restrictions.

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions further in January 2021, effectively leading to a full UK-wide lockdown.

On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the reopening of schools on 8 March, followed by easing of restrictions on outdoor gatherings on 29 March and with a hoped end to all restrictions by 21 June. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

The UK’s vaccination programme started on 8 December 2020, and with the Pfizer-BioNTech, Moderna and Oxford-AstraZeneca vaccines licensed for use in the UK, the government achieved its aim to offer a first dose of the vaccine to 32 million people by mid-April and now aims to offer a first dose to all remaining adults – approximately 21 million people – by the end of July.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its March 2021 Economic and Fiscal Outlook Report. After the fall of 9.9% over the course of 2020, the scenario suggests that UK GDP will grow by 4% in 2021 and 7.3% in 2022.

GDP isn’t expected to return to pre-COVID-19 levels until Q2 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster-than-expected rollout of vaccines. The recovery in GDP is expected to be fuelled by a rise in consumer expenditure, which dropped by 11% in 2020 as many opportunities for household spending were cut off.

Unemployment is expected to peak at 6.5% in Q4 2021. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

Generational definitions

Generation Alpha (10 and under)
Generation Z (11-23)
Younger Millennials (24-30)
Older Millennials (31-39)
Generation X (40-55)
Baby Boomers (56-74)
Swing Generation/World War II (75+)
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