Consumer confidence and propensity to make a big purchase have both increased in the weeks before Christmas, providing retailers with a bit of festive hope in the last few shopping days left.
GfK’s consumer confidence index shows a “clear sense of change” in sentiment this month, with a jump in perceptions of the economy, people’s own finances and the purchase index. While the survey was run before the result of the general election, it suggests people expected an “unambiguous” result, which they got when the Conservatives won with a majority of more than 80.
“There’s a welcome three-point increase in the overall index score this month. It’s not the first time we have seen a three-point jump this year – the same thing happened in May. But this time, after a dramatic and unambiguous general election result, it feels different,” GfK’s client strategy director Joe Staton tells Marketing Week.
The overall index score increased by three points compared to November and to the same month last year, although it remains in negative territory at -11. Of particular note is seven-point uplift in consumers’ perceptions of the general economic situation over the next 12 months and a three-point increase in their likelihood to make a major purchase.
The measure of the economy over the past 12 months was also up three points, while perceptions of people’s personal financial situation over the next 12 months rose two points.
Only the measure of the personal finances over the past 12 months was down, by three points.
The last time there was such a big increase in perceptions of the economy in the next year was after the Brexit referendum in 2016, when it jumped 11 points in August and then 13 in September. And while the verdict on the economy has steadily weakened since then, it looks likely this upward movement should continue into the new year at least.
“The change in direction is welcome and there’s every likelihood that the trend will build in January. If that happens, it could be the start of a much bigger transformation of the consumer mood,” says Staton.