Consumer confidence edges up but marketers warned ‘not to be fooled’
Latest figures from GfK show consumers are increasingly saving rather than spending, a concern as the critical Christmas shopping season approaches.
Brands were warned last month that there was “unlikely to be any optimism for the foreseeable future” after dire consumer confidence figures last month. However, just a month later and consumer confidence is back on the up. In fact, in August all six of GfK’s main measures experienced a lift following a two-month run of deep declines.
The headline consumer confidence metric edged up two points to -10 in August. And consumer perceptions around personal finances over the last 12 months experienced the biggest gains, rising four points to a score of two.
Meanwhile, the major purchase index rose one point to zero, although this is seven points lower than it was in August 2016. The measure for perceptions of the public’s general economic situation over the last 12 months (-30) and over the next 12 months (-27) also both rose by one point.
Yet, despite experiencing growth across the board, GfK’s head of market dynamics Joe Staton says marketers shouldn’t be fooled by the numbers.
“Is something good happening? Don’t be fooled! Last month’s score of -12 matched last July’s post-Brexit low but sentiment often bounces back when we see marked lows. Stand back and look at the two recent highs the overall index score achieved in June 2015 and again in August 2015 and the route since then is straight down,” he tells Marketing Week.
“These figures must be seen against the backdrop of better news on inflation, public finances, jobs and growth prospects as the UK economy displays some signs of stability after a volatile start to the year.”
According to Staton, British consumers are now more likely to save money than spend it. This mindset, he says, is something marketers will have to acknowledge as the big Christmas spending season approaches.
He concludes: “We are a long way from the dark days of 2008, of course, when the overall index score sank to -39, but the macro climate in coming months might just be enough to push us further in that direction. People save their money when dark clouds loom and it’s interesting to compare this month’s savings index at +6 with a year ago when it was -15. In just a year, the consumer’s determination to save money has risen significantly. Let’s see what happens.”
