As Christmas approaches, consumer confidence remains notably weak, overshadowed by growing economic concerns.
- A recent survey indicates a slight improvement in personal financial expectations, yet overall confidence remains fragile.
- Retail spending intentions have seen a modest increase, but savings rates have shown no change.
- Concerns over the broader economy have intensified, highlighting ongoing consumer unease.
- The retail sector faces significant challenges, with potential price increases looming due to rising costs.
The latest survey from the British Retail Consortium (BRC) conducted in mid-November highlights subdued consumer sentiment despite the impending festive season. Participants reported a marginal improvement in their personal financial outlook for the upcoming quarter, with figures moving from -4 in October to -3 in November. However, this slight uplift does little to dispel the pervasive worries weighing on the public’s mind.
Consumers’ planned spending in retail climbed slightly, now at a figure of 3, compared to 2 in the previous month. Yet, the overall picture for personal spending and savings remains stagnant, with savings firmly flatlining at -9. These numbers reflect a cautious consumer approach, prioritising necessary expenditures while remaining hesitant to save more.
Alarmingly, expectations for the UK’s economic trajectory have taken a downturn, with a dip from -17 to -19. This growing apprehension among consumers underscores the broader anxieties regarding national economic health as the end of the year approaches.
Helen Dickinson, CEO of the BRC, articulates the impact of the Chancellor’s recent Budget on the retail landscape, stating, “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 posits that escalating costs anticipated in 2025 will force retailers into difficult decisions, such as raising prices or curbing investments in jobs and store infrastructure.
In a collective response to these looming financial pressures, nearly 80 retail leaders recently endorsed a letter appealing to the Chancellor for reconsideration of fiscal policies. They warned of inevitable job reductions and unavoidable price hikes, should the current strategy remain unaltered. The retail community’s unified voice signals the depth of concern over the sustainability of current economic policies.
As the festive season draws nearer, economic uncertainties continue to cloud consumer optimism and influence spending behaviours.
