Consumers taking ‘wait and see’ approach to big purchases as confidence takes a knock

Consumers are taking a “wait and see” approach to making big purchases despite an improvement in their personal financial situations as increases in consumer confidence “run out of steam”.

Shoppers are taking a 'wait and see' approach to making big purchases, such as TVs
Shoppers are taking a ‘wait and see’ approach to making big purchases, such as TVs

The latest figures from GfK’s consumer confidence index show that propensity to make a big purchase feel by five points in October compared to September to -5. This despite a three-point increase in how confident people feel that their personal financial situation will improve over the next 12 months.

“For retailers there is a mixed message. This is very much a time to wait and see,” says GfK’s managing director of social research Nick Moon.

The figures will be a concern for retailers as they approach the critical Christmas shopping period. Recent research from retail analysts Verdict forecast that shoppers will remain “cautious” over Christmas, with retail sales forecast to rise by 2.6 per cent to £90.7bn.

It predicts that electrical goods, included in GfK’s “big purchase” index, will see “steady if not spectacular” growth.

Overall, the index dropped -2, the seventh month in a row that the figure has stood within 2 points either way of -1, with Moon suggesting that the “almost constant improvement seen between April 2013 and June 2014 has completely run out of steam”.

The signals on economic mood also fell compared with September while the savings index, which isn’t included in the overall index score, was up by 3 points.

Overall, consumer confidence is up compared to a year ago when the score was -11.

GFK UK consumer confidence infographic