Consumer confidence ‘deteriorating sharply’ as energy crisis continues

The biggest decline was in perceptions of the UK economy, with an eight-point fall in perceptions of how it has performed over the past 12 months and a six-point fall in how it is likely to perform in the future. 

”Consumer confidence is deteriorating sharply, with fuel prices and threats of more energy price increases acting as constant reminders of inflation. While the Gulf crisis is intensifying pressures, much of the current strain reflects earlier domestic cost increases. How long can all this disruption and pain continue?” said Neil Bellamy, consumer insights director at GfK, an NIQ company. 

Worryingly for retailers, consumer views of their own finances have also started to slide.

“Consumers were arguably resilient about their personal finances in March, but this month’s finance measures, looking back a year (-11 [points]) and looking forward (-4 [points]), have seen significant slides,” said Bellamy.

“Everyone is grappling with rapid price rises, especially at the fuel pumps, which are taking a dent out of household budgets, and people know further price hikes are coming. The only measure to go up is our savings index, often an indication that people are concerned about what lies ahead, so those who can are building contingency funds.”

Earlier this week, the British Retail Consortium described consumer confidence and the public’s perception of its ability to spend as “in the doldrums”, citing its own survey figures with polling firm Opinium. 

Sainsbury’s boss Simon Roberts became the latest major retail boss to warn about the effects of the energy crisis, saying there was “no doubt there will be pressure on food prices”. He also called on the government to extend energy price relief to food growers, manufacturers and retailers.