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How the subscriptions market is developing as the cost of living rises

Image courtesy of Hello Fresh

Subscriptions related to healthy eating and exercise grew this New Year, but there was weaker spending in areas such as vegetable delivery boxes and meal kits as shoppers cut back on non-essentials, new research suggests. 

Health and fitness subscriptions both grew in January, but overall spending fell year-on-year according to  Cardlytics analysis of spending data from 24m UK bank accounts. It showed that spending on gym subscriptions was 14% higher than in December, while at home workout plans and healthy meal kits grew by 11% between December and January. In-person gyms (+13%) such as David Lloyd and LA Fitness benefited but at-home fitness subscriptions that grew quickly during the pandemic fell. While transactions in those subscriptions had grown by 1,070% since 2019, spending this January was 25% down. 

Orders for balanced meal kits were 11% up in January on December, but remain lower than a year earlier. Spending on fruit and vegetable box subscriptions was 16% down on the same time last year, while meal kit subscriptions were down by 9% over the same period. Subscriptions such as Hello Fresh, Mindful Chef and Gousto had risen by 379% since 2019, but are now 9% down on last year.

Spending on fruit and vegetable delivery subscriptions, meanwhile, was down by 20% month-on-month, and by 16% year-on-year. 

Sharina Mutreja, partnerships director at Cardlytics, says: “January typically represents a clean slate for consumers who use the new year as an opportunity to not only set goals but also assess their finances and evaluate areas to cut back.

“The convenience of subscriptions allows brands to capitalise on such resolutions but this year’s dampened spending, particularly across the health and fitness space, could provide an indication of what retailers can expect in 2023.

“Brands need to recognise and understand changing consumer needs in the face of rising costs, offering tailored promotions, cashback and discounts on the subscriptions that matter most, to help build loyalty in the long term.”

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