Consumer confidence has waned due to concerns over taxes, food, and fuel prices, while the end of the Farlow plan means consumers are “rushing in at intervals” in anticipation of financial hardship.
According to the latest GfK Consumer Confidence Index, rising costs of bills and the end of the furrow scheme cause consumers to “lose their nervousness” and anticipate a “cost of living crisis.”
The index is down five points this month from -8 in August to -12, with all sub-measures falling within a month, a rare occurrence. GFK Client Strategy Director Joe Staton says the decline is clearly not welcome news, with marketers aiming a shot at the sales target just before Christmas. “We often don’t see all the sub-steps going down in a month, but September does exactly that.
The biggest downside in the next 12 months is how people see the general economy, ”Staten told Marketing Week. Confidence in the economy is expected to decline from -6 to -16 per month over the next 12 months. Confidence in the economy has also fallen from -42 to -43 in the last 12 months, but confidence has improved from -61 in September last year.
The downward trend is seen in the personal financial situation of consumers, with confidence declining from zero to -4 in the last 12 months, while the economic outlook for the next 12 months drops from 11 to 5. Combining forward-looking outlooks for the general economy (-6 to -16) and consumer finance conditions (11-15), Staten says future actions are a “worrying” revelation that consumers are “losing their nerves” and how consumer sentiment has improved over 2021.
Marketers saw happy reasons last month, as overall confidence stabilized at -8, a good improvement over the -27 score over the same period a year ago. In August, GfK reported that consumer confidence was higher than pre-pandemic levels. Meanwhile, the major buying index for September fell to -6 from -3 last month, a “disappointing” finding for infectious-affected retailers, and is looking to make up for the loss during the major holiday duration.
“With all the measures down this month, consumers are clearly concerned about their personal financial situation and the broader financial prospects for next year,” Staton says. He adds: “When consumer confidence declines, shoppers tend to spend less, which slows down the overall economic prospects in the UK. This is really a welcome picture for 2022 and beyond.”
Follow and connect with us on Facebook, LinkedIn & Twitter
