Consumer expectations are showing signs of stagnation, according to the British Retail Consortium.
For UK consumers, their expectations regarding the state of the economy improved slightly to -32 in August, up from -33 in July.
Consumers’ personal financial situation improved slightly to -6 in August, up from -7 in July, while their confidence in personal savings rose to +2 in August, up from -3 in July.
Their personal spending on retail also rose slightly to +4 in August, up from +3 in July and consumers’ personal spending overall was unchanged at +16 in August, the same as in July.
BRC chief executive Helen Dickinson said: “While consumer confidence in the economy crept up this month, it remains 24 points lower than a year ago, with older generations seeing the biggest falls. Full-time workers were far more optimistic than those working part-time, unemployed or retirees, reflecting that they were also the only group who expected their financial position to improve in the next three months. With prices rising and food inflation predicted to hit 6% by the end of the year, households are expected to spend more on retail goods in the coming months, with groceries showing the biggest increase.
“Rising food inflation will make it harder to lift consumer confidence out of the doldrums. Belief in the economy has stayed stubbornly below -30 for six of the last seven months, a far cry from the net positive sentiment in July 2024. Consumers see rising prices, gap-toothed high streets and reports of large businesses falling into administration. Much rides on the chancellor’s plans for retail, hospitality and leisure, and only a significant reduction in the business rates burden can bring about the levels of investment needed to reinvigorate Britain’s high streets and town centres.”
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