Consumers favour spending over saving this Christmas

Following a nosedive last month, British consumers’ major purchase intent showed signs of recovery in November according to GfK’s latest UK Consumer Confidence Index.

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The major purchase intent score hit 9 In November, compared to just 7 in October; the latter a score that fell considerably from 14 points in September 2015.

However, British consumers appear to be in a much more confident mood moving into the December’s gifting period than they were 12 months ago, with the purchase intent score up 9 points from November 2014.

Joe Staton, head of market dynamics at GfK, said retail brands can go into Christmas with confidence.

He told Marketing Week: “You’d expect people to put money aside when consumer confidence wavers. Yet that’s not what people are telling us they are doing.  So we have an interesting picture of people willing to spend during a period of sliding depressed consumer confidence rather than looking to squirrel their spare cash away as a safeguard against it.

“It’s a slightly counter-intuitive combination but retailers will certainly welcome the fact that spending intentions are intact in the run-up to Christmas.”

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A mixed picture

However, four of the other measures used to calculate consumer confidence were in decline this month.

The overall consumer index score fell 1 point from October, while consumers’ perception of the general economy decreased one point to -5.

Expectations for the economy over the next 12 months, meanwhile, fell two points to -6 – a rate six points lower than in November  2014.

And despite rising last month, British consumers’ personal finances also took a hit in November. The GfK index measuring personal finances during the last 12 months fell by three points this month to +1; although this is 8 points higher than a year ago.

Yet despite not being entirely confident of their current financial situation, consumers do still see better days ahead. For the third month in a row, consumer’s views of their personal finances over the next 12 months held at a score of 6; a rate 4 points higher than last year.

Staton concludes: “One area that continues to hold up is our expectation for our personal financial situation for the next 12 months. Shoppers also continue to tell us that now is the right time to make a major purchase – such as furniture or electrical goods – with this indicator standing nearly 10 points higher than in November last year.

“This suggests that lots of households up and down the land will be sitting on a new three-piece suite this December to watch Downton Abbey on an ever wider TV screen while digesting their Christmas turkey and all the trimmings.”

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