Concerns of Possible Brexit Hits Consumer Confidence

Consumer confidence levels fell into negative territory for the first time in 15 months during April amid heated debate about what Brexit could mean for the UK economy.

The latest GfK Consumer Confidence Index dropped three points in April to -3 with the all of the measures used to calculate the Index seeing decreases. The major purchase index, which analyses consumers’ propensity to make a major purchase, was particularly effected, falling six points to a score of 5.

Joe Staton, Head of Market Dynamics at GfK, said: “Mixed-messages about a post-Brexit world and the on-going Eurozone crisis are casting a cloud over our economy. After a continuous 15-month showing of positive numbers in the barometer, April 2016 sees the UK drop back into negative territory with a -3 score.”

He added: “The biggest dent to confidence comes from consumers’ depression about the general economic situation in the UK for the next year, dropping 20 points in 12 months. Against this backdrop, even faith in our personal economic fortunes has taken a battering contributing to the overall fall in the numbers. Trends in confidence show our degree of optimism about the state of the economy and this indicator will make for interesting reading between now and the EU referendum on June 23rd.”

NAM Implications:
  • Uncertainty causes consumers to cut back on spending, pay down debt and ‘make-do’…
  • Meaning flat-line demand for the remainder of 2016…
  • …with any brand/product growth coming at the expense of competition…
  • Time to reassess your competitive appeal relative to available alternatives?