Consumers in the UK are displaying a strong desire to spend, as shown by recent surveys conducted by PwC and Deloitte. This positive news comes at a crucial time for retailers as the country prepares for the easing of restrictions on “Freedom Day”. The surveys reveal that consumer confidence levels have reached their highest point since late 2019.
One major factor contributing to this increase in confidence is the high vaccination rates in the UK and the limited opportunities for spending due to lockdown measures. Many households have accumulated higher levels of savings as a result. Moreover, when asked about their disposable income, a greater number of households expressed optimism about their financial situation in the coming year. However, it should be noted that the surveys were conducted before the recent surge in Covid cases and the subsequent confusion over new regulations, which may explain the differences in findings compared to other surveys.
While confidence has risen compared to the previous survey conducted in March, respondents now anticipate a longer timeline for a return to normalcy. Spending plans have also changed, with a decrease in intentions to spend heavily on hospitality and leisure activities, and an increased focus on products and services for the home. Additionally, one in four households indicated that they expected to increase their spending during the Christmas season.
Lisa Hooker, the head of consumer markets at PwC, expressed her delight at the consistently positive consumer sentiment as the UK emerges from the pandemic and lifts all lockdown restrictions. Meanwhile, Deloitte’s quarterly consumer tracker revealed that consumer confidence has returned to pre-pandemic levels. The tracker recorded a reading of -9% for the three-month period ending in June, the highest reading since the fourth quarter of 2019. Over 3,000 UK consumers were surveyed in late June for this analysis.
The latest figures demonstrate a growing confidence in the economy, fueled by the belief that spending will rebound as restrictions are further lifted. Job security confidence has also seen an increase compared to the previous quarter, likely attributed to the success of the furlough scheme in mitigating the economic impact of the pandemic. With a significant majority of respondents reporting increased savings, the stage is set for a consumer-driven recovery in economic activity. Debapratim De, senior economist at Deloitte, predicts that the next six months will see greater growth than the four years preceding the pandemic.
The surveys also noted a widespread increase in leisure spending as pubs and restaurants reopened for indoor service, reflecting the pent-up demand for social activities and dining experiences.
Overall, these surveys paint a positive picture of consumer sentiment and confidence in the UK. As the country continues to navigate the post-pandemic recovery, retailers and businesses can potentially expect an increase in spending, primarily focused on home-related products and services. The data also suggests that the upcoming festive season may see a boost in consumer spending. With vaccination efforts progressing and lockdown restrictions lifting, the stage is set for a consumer-driven rebound in economic activity in the months ahead.
Useful Links:
– PwC’s Consumer Sentiment Index
– Deloitte’s Quarterly Consumer Tracker
