As Christmas approaches, consumer confidence remains low due to economic uncertainties.
- Research by the British Retail Consortium highlights mixed financial expectations among households.
- Marginal improvement observed in personal financial outlook, but economy-wide pessimism persists.
- Retail spending shows slight growth, primarily driven by preparations for Christmas.
- Rising costs signal potential for increased food inflation, affecting retail prices.
The festive season brings little cheer to consumer confidence, as economic fears persist across the UK. A survey conducted by the British Retail Consortium (BRC) reveals a mixed outlook among households regarding their financial future and the broader economic landscape. With the data collected from 2,000 UK adults between 12 and 15 November, insights show a slight uplift in personal financial expectations, from a score of -4 in October to -3 in November. However, this optimism does not extend to the wider economy, with these expectations dropping to -19, from -17 in the previous month.
Despite these economic concerns, there is a small uptick in personal retail spending. This increase from +2 in October to +3 in November indicates a slight boost as consumers gear up for the festive period. Overall spending remains steady at +17, matching October’s figures, while saving expectations hold at -9. Notably, spending on non-food items continues to lag, though there is a marked improvement in expenditure on dining out, as individuals plan for seasonal gatherings with friends and family.
BRC CEO Helen Dickinson noted the stagnation in consumer confidence remains a concern. She stated, ‘There was little shift in consumer confidence since the Chancellor’s Budget, with many worried about the economy in the lead-up to Christmas.’ She emphasised that while personal financial expectations improved slightly, this was offset by declining views on the economy. She further warned that the retail sector faces significant challenges, with anticipated cost increases exceeding £7bn in 2025 due to the Budget, which could lead retailers to raise prices or reduce investment in jobs and shops.
Further compounding these issues is the warning from over 70 retailers who, in a letter to Reeves, highlighted that the new financial burdens on businesses could exacerbate inflation. This potential rise in food inflation, driven by these costs, presents a looming challenge for both consumers and the retail industry.
These economic apprehensions and rising costs paint a challenging picture for the upcoming Christmas period, with consumers and retailers alike facing uncertainty.
