According to recent data from GfK, a leading data company, there has been a surprising surge in consumer confidence in the UK, which could spell good news for retailers in the run-up to Christmas. Despite concerns about the rising cost of living, the Consumer Confidence Index has rebounded by six points, following a nine-point decline in October. The overall reading now stands at -24.
Although all five measures in the monthly report have improved compared to the previous month, most of them still remain in negative territory. The index measuring changes in personal finances over the past year is up three points at -16, which is eight points better than November 2022. Meanwhile, the forecast for personal finances over the next 12 months has increased by five points to -3, marking a 26-point improvement compared to the same period last year.
The measure for the general economic situation of the country over the past year has risen by five points to -49, showing an 18-point increase compared to November 2022. Expectations for the general economic situation over the next 12 months have also improved, rising by six points to -26, which is 32 points higher than last year.
Furthermore, the major purchase index, which gauges consumers’ willingness to make significant purchases, has risen by 10 points to -24, which is 14 points higher than last year. The savings index has also increased by four points to +29, an eight-point increase compared to the previous year.
Joe Staton, Client Strategy Director at GfK, commented on these findings, stating that the fluctuations in consumer confidence reflect the unpredictable economic climate in the nation. Despite positive news regarding decreasing inflation and wage growth, these factors are overshadowed by high personal taxation, expensive fuel, and energy bills. However, the improved consumer confidence in personal financial situations indicates that people are feeling more optimistic about the future and are willing to look beyond the short term.
Staton also highlighted the noteworthy 10-point increase in the major purchase sub-measure, which counteracts some of the concern stemming from last month’s 14-point drop. This development should be promising for retailers who are hoping to capitalize on Black Friday and the Christmas shopping period. Despite financial pressures, many consumers still want to loosen their wallets slightly to enjoy the festive season’s feel-good factor.
Overall, this unexpected surge in UK consumer confidence is providing hope for retailers as they approach the crucial holiday season. With consumers feeling more positive about their personal finances, there is a potential for increased spending during Black Friday and Christmas, which would offer a much-needed boost to the retail sector.
Useful links:
BBC: UK Consumer Confidence Boost before Christmas
Retail Gazette: UK Consumer Confidence Edges Up
