Consumers still unwilling to spend despite lockdown easing

Consumer confidence remains at record lows as hope fades of quick economic bounceback.

Consumer confidence has remained at record lows and consumers are still unwilling to spend despite the lockdown easing, as hopes fade of a quick economic bounceback.

GfK’s monthly consumer confidence index remained at -34 in May – the same level as April and 14 points below where it was in May 2019.

People’s perceptions of their personal financial situation over the next 12 months have improved from -14 last month to -9, while feelings about the general economic situation over the next 12 months have improved by two points. However, this is yet to translate into spending plans, with propensity to make a major purchase stuck at -47, way below the score of one in May 2019.

And despite having no plans to spend, consumers are not planning to save much either. While May’s score of 14 is an improvement on the five recorded in April, it is still below May 2019’s score of 16.

GfK’s client strategy director, Joe Staton, tells Marketing Week: “While the UK government begins to flesh out what our post-lockdown world will look like, and as it proposes provisional dates for getting different parts of society back to a ‘new normal’, consumers are just not buying into the plans. Nothing has changed. They are still not feeling confident.”

Consumers have also become more pessimistic about the last 12 months, with the score for personal financial situation stuck at -4. Feelings about the general economic situation over the past 12 months have fallen by 11 points month over month to -55.

“We need the proverbial ‘game changer’,” adds Staton. “A vaccine is the best solution of course, big progress on effective treatments and a great leap forward in contact tracing and testing would help. But consumers are telling us clearly that there’s a long way to go just yet.”