Tough Christmas ahead for retailers as consumer confidence remains low
Retailers are “braced for a difficult Christmas” after a marginal increase in consumer confidence in the third quarter.
Although the GB Consumer Confidence Survey from Nielsen and the BRC recorded a one percentage point improvement to 73 in the period, jobs fears rose and 86% of consumers believe the country is still in recession.
The Nielsen report found that British shoppers seem to be adapting better to the economic downtown as consumers who feel negative about their finances has reached its lowest level in more than a year, settling at 58%.
The proportion of consumers worried about debt is down four percentage points to 14% on the previous quarter, while the percntrage of those without ‘spare cash’ has eased for the first time in 18 months, dropping sharply from 32% in the second quarter to 25% in the third.
The survey found rising utility bills are consumers’ biggest concern over the next six months and two-thirds plan to try and save on their gas and electricity.
BRC director general Stephen Robertson said: “Consumer confidence has barely improved on the previous quarter and is still lower than at any time last year.
“Even though this week’s figures show the economy growing by 0.5 per cent, 86% of people believe we are still in recession and only 11% think that will change in the next 12 months.
“Utility bills are people’s biggest concern with over half trying to save on gas and electric bills, confirming that rising costs and low wage rises are putting disposable incomes under huge pressure. With jobs fears mounting and no relief in sight this year, retailers are braced for a difficult Christmas.”
Neilsen managing director for the UK and Ireland Chris Morley said supermarkets are experiencing volume declines as consumers watch what they spend more closely.
“But not all shoppers are feeling the downturn in the same way. One in four reports having to cope with having no spare cash, which suggests the downturn is impacting some people more than others.
“Overall, most shoppers remain fickle and are shifting spend towards retailers that offer the most immediate savings. But shoppers want more value - other than just cheap prices - so retailers trading purely on low price will only attract the most disloyal shoppers.”