Consumer confidence stabilises as Gen Z gears up to spend

The state of the economy improved slightly in March to -35, up two percentage points, according to the latest BRC Consumer Sentiment Monitor.

Consumers also felt their personal financial situation improved slightly in the month, up to -10 compared to -11 in February.

Personal spending on retail jumped five percentage points in March, up to zero for the period, compared to -5 in February, while personal savings slipped to -5 compared to -3 in February.

British Retail Consortium chief executive Helen Dickinson said: “Consumer confidence stabilised this month after February’s record low. This was coupled with an increase in spending expectations for the three months ahead, both for retail spending and spending more generally. Within retail, spending expectations for DIY and home improvements moved into positive territory for the first time. Across all categories, Gen Z (18-27) expected to spend more than the previous three months in every category, while Gen X (44-59) planned the biggest cuts to spending for most items, excluding food. Food and grocery spending expectations continued to outperform other categories, hitting a new high, though this could also be due to the expectation of rising prices.

“The spring statement is an opportunity for the government to inject some confidence back into the economy. In a matter of weeks, retailers grapple with the reality of billions in extra costs from the increases to employer national insurance and the national living wage. This £5bn in new costs will give many no option but to push prices up. Food inflation is likely to hit 5% by the end of the year, and with further costs from the new packaging tax and implementation of the Employment Rights Bill, prices risk being pushed up further. Without a much-needed confidence boost from the government, the scale of new costs will see retail investment fall further, holding back future growth in the economy.”