Heading into the all-important Christmas trading period, consumer confidence has improved in recent weeks after taking a nose dive last month. However, the figure from GfK remained firmly in negative territory, with cost of living pressures still being a major limiting factor on household spending.
The research group reported that its monthly Consumer Confidence Index had increased by six points to -24 in November. This followed a nine-point drop the previous month as people contended with surging mortgage and rental costs, and higher petrol prices.
The latest Index saw all five measures up in comparison to the last announcement:
“Recent ups and downs in confidence have underlined the nation’s topsy-turvy economic mood as encouraging news about falling inflation and wage growth is offset by high personal taxation, alongside costly fuel and energy bills,” said Joe Staton, Client Strategy Director GfK.
“Although the Overall Index Score is still tracking firmly in negative territory, it is good to see that consumers are more optimistic about their personal financial situation. This shows people are thinking about their future with increased confidence and willingness to look beyond the short-term.”
He added: “The dramatic 10-point jump in our major purchase sub-measure, reversing some of the worrying 14-point drop we saw last month, will be good news for retailers looking to benefit from Black Friday and Christmas. Despite the acute cost-of-living pressures, many would still like to loosen their purse strings just a little so they can enjoy that feel-good factor we all associate with the festive season.”
The figures are likely to give some encouragement to retailers as they head into the crucial Christmas period. However, concerns remain over the impact that high interest rates and inflation will have on spending this year.
Linda Ellett, UK head of consumer retail and leisure for KPMG, said: “Four in 10 consumers that KPMG surveyed said that the higher cost of living will require them to spend less on Christmas gifts this year. Even those spending the same amount as last year may well find that it equates to less volume due to the impact of inflation.
“Retailers are competing for this shrinking spend, with over a third of consumers telling us they are spending more time now searching for the best-priced goods. Whether it be Black Friday, Christmas, or generally, consumers are watching prices and looking out for genuinely good promotions and discounts.”
