‘No festive cheer’ for retailers as consumer confidence drops to lowest level for 9 months

Consumers will not gift retailers with a “festive bounce” as consumer confidence dropped two points to its lowest level for nine months in December, according to new figures.

The latest figures from GfK’s consumer confidence index show that propensity to make a big purchase dropped by one point in December to -1. This despite the fact that consumers feel more positive about their personal financial situation over the past 12 months, which saw a one-point increase.

Overall consumer confidence levels are also down, with GfK’s Index score falling to -4, its lowest level since March. While still significantly higher than it was two ago when the Index stood at -29, the drop marks a change from the “steady” performance GfK has seen over the past seven months suggesting that consumers are more concerned than ever in the run-up to Christmas.

People’s perceptions of the economy both over the past 12 months and in the next year fell by four point and five points respectively while their view of their personal financial situation over the next 12 months has also slipped, by 1 point.

Nick Moon, managing director of social research at GfK, says: “Given the time of year, there’s no evidence of any festive cheer among consumers – no Christmas or New Year bounce. Look at the measures for how people are viewing the next 12 months in terms of household finances and economic mood. Both have dipped. Are people at least gearing up for big purchases like furniture or electrical goods? No – that has slipped a point.”

GfK's consumer confidence index
GfK’s consumer confidence index

“Stuttering consumer confidence”

The GfK findings are backed up by a study from YouGov/Cebr, which shows consumer confidence dropped back to a score of 110.1 in December compared to the previous year, the second lowest figure in 2014. Consumer expectations of their financial situation and job security both fell, as did outlooks for business activity.

Stephen Harmston, head of YouGov Reports, says: “The stuttering consumer confidence we have seen over the last few months continues as we approach Christmas. People feel less certain about their household finances in the run-up to the festive period which could hamper spending, and our recent figures point to households’ Christmas outlay flat-lining this year.”

The drop in confidence comes despite an uptick in disposable income. According to Asda’s Income Tracker, families had £11 more to spend in November than they did at the same time last year as the price of food and fuel dropped.

Asda says: “With inflation at its lowest level in 12 years at just 1.0%, and wages growing at 1.6%, it was a win-win situation for Brits who are now earning more, but paying less for the essential items they need.”

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here