Light on the horizon? UK consumer confidence is ahead of December 2022
Consumer confidence is up this December, ahead of this time last year, according to figures from GfK. Its Consumer Confidence Index increased two points to -22 in December, up on the previous month too, with all five measures up in comparison.
However figures were still in negative territory, little surprise with a cost-of-living crisis underway for many of us, but GfK noted the “slow but persistent movement towards positive territory for the personal finance measure looking ahead is an encouraging sign for the year to come”.
Joe Staton, Client Strategy Director GfK, added: “Against the backdrop of flatlining economic growth, interest rates at a 15-year high, and price rises potentially eroding disposable income for years to come, the Consumer Confidence Index shows a modest improvement this month with gains across all key measures. Although the headline figure of -22 means the nation’s confidence is still firmly in negative territory, optimism for our personal finances for the next 12 months shows a notable recovery from the depressed -29 reported this time last year. Recovery in this number is important as it best reflects household financial optimism and control over personal budgets.
Meanwhile the British Retail Consortium (BRC) found that consumers had been cautiously delaying their Christmas spend. It noted that an early starting Black Friday delivered a boost initially, momentum failed to hold and there was evidence that households were cutting back on Christmas spending.
At the start of December, Paul Martin, UK Head of Retail, KPMG, noted: “With two of the three months of the crucial golden quarter seeing sales growth below 3%, it has already been a weak Christmas trading period. Any excess stock not sold before Christmas could be further reduced leading to big January sales, and potentially having an even greater impact on already tight margins. As we look to the first few months of 2024, we can expect the challenges to continue which could lead to further casualties in the sector, particularly pure online players facing more than 28 months of consecutive sales decline.”
Paul Martin’s point about pureplay online players suffering has certainly been borne out in the cycle industry, with WiggleCRC mortally impacted by difficult trading conditions. Earlier this year, the Office of National Statistics found that UK consumers were turning to outdoor goods, despite the downturn.
