The number of UK consumers changing spending habits to save money on household expenses such groceries has hit its lowest level on record, according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions.
Those reporting doing so in the first quarter of this year dropped to 46% – the lowest level since the metric first appeared in the survey seven years ago (Q1, 2009). Britons are much less likely to be changing spending habits to save money than both the global (68%) and European (59%) average.
The proportion of Britons who’ve switched to cheaper grocery brands to save money – an activity often regarded as a barometer of consumer sentiment and behaviour – also dropped to the lowest level on record (22%). In tandem, the number of people in the UK believing it’s in a recession also hit its lowest-ever level (42%) since it first appeared eight years ago (Q1, 2008).
However, the number of UK consumers feeling positive about making purchases dropped back from a record high of 52% to 49% in Q1 2016.
“Although people are loosening the purse-strings, overall, they’re still cautious about what lies ahead, borne out by the recent disappointing retail barometers,” said Nielsen UK & Ireland managing director Steve Smith. “In fact, the most popular destination currently for people’s spare cash is their savings account, rather than the high street, whilst many are using it to pay off debt.”
Over half (53%) of people with any spare cash are putting into savings. The next most popular option is spending it on holidays (44%) or new clothes (32%), whilst 31% are using it to pay off debts, credit cards or loans.
“Overall, it’s a slight case of conflicted thinking among UK consumers about money,” observed Smith. “Concerns about utility bills, food prices and job security declined on the previous quarter but concern about the economy and political stability, no doubt due to Brexit, rose slightly.”
How UK Consumer Confidence compares
The UK Consumer Confidence Index fell four points to 97 in Q1 2016. Confidence across Europe as a whole fell three points to 78. Alongside Germany (97) the UK is Europe’s second most confident country, behind Denmark (105).
A score over 100 indicates degrees of optimism, below 100, degrees of pessimism. The global Consumer Confidence Index stands at 98. India (134) has the highest score globally, South Korea the lowest (44).
The scores are derived from Nielsen’s study, established in 2005, which measures attitudes each quarter on topics including personal finances and job prospects among 30,000+ internet consumers in 63 countries.
To view historical trends for all countries, broken down by metrics such as financial concerns and job prospects, visit the interactive Nielsen Global Consumer Confidence Trend Tracker.