Table of Contents
Executive Summary
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- The market
- Economic recovery is leading to greater demand for credit
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- Figure 1: Gross credit extended as % all consumer spending, 2003-14
- Retail credit market worth £49 billion in 2014
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- Figure 2: Retail credit, 2014
- Forecast
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- Figure 3: Retail credit extended, 2010-20
- Retailers and credit
- Market shares
- The consumer
- Who uses retail credit?
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- Figure 4: Retail credit used in the last year, July 2015
- How much credit?
- Spending plans
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- Figure 5: What extra money left over is spent on, July 2015
- Retailers used for credit
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- Figure 6: Retailers borrowed from, July 2015
- Why they borrowed
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- Figure 7: Why people take out credit from retailers, July 2015
- Checks done before taking out credit
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- Figure 8: Checks carried out before taking out retail credit, July 2015
- Credit and the shopping experience
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- Figure 9: Attitudes towards credit and the shopping experience, July 2015
- Attitudes towards credit offers
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- Figure 10: Attitudes towards buying on credit, July 2015
- What we think
- No great enthusiasm for retail credit
- Lack of financial sophistication among consumers
- A minority service, but one that can be important
Issues and Insights
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- Interest free credit – Because it is there
- The facts
- The implications
- Just how sophisticated are people about credit?
- The facts
- The implications
- Credit and the recovery
- The facts
- The implications
- Just how important is it to offer credit?
- The facts
- The implications
The Market – What You Need to Know
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- Recovery
- Market size
- Credit cards and car finance dominate
- Prospects
Market Size and Forecast
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- Retail in the context of all consumer credit
- Finance and Leasing Association data
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- Figure 11: Total consumer lending by FLA members, 2014
- Retail credit market size
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- Figure 12: Retail credit market, 2009-15
- Figure 13: Retail credit by segment, 2013-15
- Leisure and other spending
- Leisure
- Other spending
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- Figure 14: Consumer spending, by broad category, 2014
- Forecast
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- Figure 15: Retail credit extended, 2010-20
- Figure 16: Totals and forecast, retail credit, 2010-20
Market Drivers
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- Figure 17: GDP growth, 2005-14
- Consumer lending through the downturn - mortgages
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- Figure 18: Total outstanding secured lending, 2004-15
- Consumer lending through the downturn – unsecured lending
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- Figure 19: Total outstanding unsecured lending, 2004-15
- Figure 20: Total outstanding unsecured lending by credit cards and other lending, 2004-15
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- Figure 21: Outstanding unsecured consumer debt as a proportion of all consumer debt, 2004-15
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- Figure 22: Consumer credit outstanding as a % of all consumer spending, 2003-14
- Figure 23: Gross unsecured credit extended, 2003-14
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- Figure 24: Gross credit extended as a % of all consumer spending, 2003-14
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Key Players – What You Need to Know
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- Market leaders
- A marketing tool
- A service or an integral part of the offer?
- Store cards – expensive and in decline
- Banking not the same as retail credit
- Innovation and launches
- Little used
Types of Credit Offer
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- Mail order
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- Figure 25: Levi Jeans repayment example, 2015
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- Figure 26: Shop Direct example, 2015
- Interest free credit and the household goods retailers
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- Figure 27: Interest free credit retailer comparison, 2015
- Banking
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- Figure 28: Tesco and Sainsbury retailer comparison, 2015
- Credit and store cards
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- Figure 29: Selection of retailer credit card rates, 2015
- Figure 30: Retailer store card rates, 2015
- Leasing
- A note on ‘Interest Free Credit’
- Shop Direct
- Next
- Dixons Carphone
- Home Retail Group
- B&Q
- Homebase
Innovation and Launch Activity
Leading Retailers
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- Figure 31: Leading retailers: share of retail credit, 2014 (est)
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The Consumer – What You Need to Know
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- Who borrows?
- How much?
- Willingness to spend
- Who do they borrow from?
- Why do they borrow?
- Checks carried out?
- Credit and in-store experience
- Attitudes to taking our credit
Who uses Retail Credit?
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- Figure 32: Retail credit used in the last year, July 2015
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- Figure 33: Number of different credit offers used, July 2015
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- Figure 34: Profile of users of particular types of credit, July 2015
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- Figure 35: Profile credit users by the number of types of credit used, July 2015
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- Figure 36: Credit used by region relative to national average, July 2015
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- Figure 37: Credit used by age of children in household relative to national average, July 2015
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How Much Credit?
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- Figure 38: Retail credit: Amounts outstanding, July 2015
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- Figure 39: Profile of those with debt from retailers, July 2015
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Current Attitudes towards Debt
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- People are still cautious about their spending plans
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- Figure 40: Savings in last three months and plans for next three months, 2012-15
- Figure 41: Reducing debts, actual and planned, 2012-15
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- Figure 42: Those who have not and do not plan to save or pay off debt, 2012-15
- Spending plans
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- Figure 43: What extra money left over is spent on, July 2015
Retailers Used
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- Figure 44: Retailers borrowed from, July 2015
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- Figure 45: Profile of borrowers from retailers by retailer used, July 2015
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Why did People Borrow from Retailers?
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- Figure 46: Why people take out credit from retailers, July 2015
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- Figure 47: Profile of reasons for taking out credit from retailers, July 2015
- Checks done before taking retailer credit
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- Figure 48: Checks carried out before taking out retail credit, July 2015
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Credit and the Shopping Experience
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- Figure 49: Attitudes towards credit and the shopping experience, July 2015
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Attitudes towards Credit Offers
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- Figure 50: Attitudes towards buying on credit, July 2015
- Profile of those who agree with the attitude statements
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- Figure 51: Profile of those who agree with the attitude statements, July 2015
- Profile of those who disagree with the attitude statements
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- Figure 52: Profile of those who disagree with the attitude statements, July 2015
- Regional differences
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- Figure 53: Regional profile of those who would rather save than borrow to buy, July 2015
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- Figure 54: Regional profile of those for whom the type of credit on offer is important in choosing where to shop, July 2015
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Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Financial definitions
- VAT
- Forecast methodology
- Abbreviations
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