Brits turn to 'doom spending' to escape bad news

The phenomenon of ‘doom spending’ is on the rise in Britain, where individuals are spending money for a bit of cheer amidst grim political and economic news. The surge in ‘buy now pay later’ (BNPL) schemes, widespread across online shops and the high street, has been instrumental in encouraging shoppers to make impulsive purchases without the immediate pang of guilt.

According to David Jinks, Head of Consumer Research at Parcelhero, doom spending – indulging in retail therapy despite financial constraints to alleviate stress – is causing worry due to its association with increased debt. He explained: "Retail therapy is nothing new, but what is causing increasing concern is the growth of doom spending, defined by the international e-commerce analysts ECDB as the self-soothing behaviour of purchasing products, despite personal financial strain, to relieve psychological stress."

Moreover, Mr Jinks highlighted the impact of social media influencers and the allure of aspirational shopping, stating: "The rise of social commerce is fuelling the growth of doom spending. Many of us are in the habit of 'doomscrolling' - watching endless negative news on TikTok and other social media sites despite the fact we end up depressed."

He added that influencers’ marketing could prompt unnecessary purchases as a momentary pick-me-up, perpetuating a cycle of brief satisfaction followed by renewed yearning.

A recent study by Credit Karma revealed that a staggering 43 percent of millennials and 35 percent of Gen Zs engage in 'doom spending' to lift their spirits, according to Mr Jinks. He said: "People aren’t just buying non-essential 'nice to haves' such as a new pair of trainers. Increasingly, they are also making more expensive purchases such as cars and holidays."

He added: "The escalating difficulty of obtaining affordable first-time mortgages has caused younger people to give up on their dream of home ownership. Instead, they are splurging their hard-earned savings on something a little more attainable, like a new car or a great experience. It’s tempting, but it’s short-term thinking."

He warned: "Doom spending is becoming an increasingly easy trap to fall into. Online shopping gives us that buzz with just one click of a button, while staggered payment options from the likes of Klarna and PayPal Credit make it deceptively swift and painless."

He expressed concern that social commerce targets users who may be particularly susceptible to doom spending.

He pointed out: "The #TikTokMadeMeBuyIt trend, where many millions of users show off the latest items they have bought via the platform and other sites, reveals just how popular this latest form of retail therapy has become. It also gives a false sense of safety in numbers. Just because many other people are indulging in doom spending doesn’t mean it’s okay."

Mr Jinks has suggested several measures that consumers can adopt to manage their spending. These include meticulous financial planning to determine any available "spare" income each month.

Other strategies involve activating banking notifications and maintaining a spending journal to keep track of purchases. He highlighted that one effective method people are using to curb excessive spending is by physically visiting a store and paying with actual cash, rather than using a phone app or card.

"There’s something about spending 'real' money that makes us think twice," he commented. Mr Jinks also noted: "In the US, steps have been taken to curb the cycle of doom spending. For example, America is introducing new legislation insisting on simple 'click to cancel' subscription requirements and ending regular subscription renewals without active consent from consumers."

He added: "While US and UK consumers may suffer from similar anxieties, there are many examples of differences between the UK and US in terms of consumer laws."