Retailers face a difficult Christmas as the UK’s internet consumers look to save money on their utility bills and opt for retailers offering immediate savings, a new report suggests.
The latest GB Consumer Confidence Survey, from Nielsen and the British Retail Consortium, found a small, one point, rise in confidence to 73 points in the third quarter of this year, compared to the second, suggesting that consumers are coming to terms with new economic realities. But 86% still think that the UK is in recession and 76% think job prospects will be negative in the year ahead.
The survey tracks the consumer confidence, concerns and spending plans of more than 28,000 internet consumers in 56 countries. Its latest report, released today and covering the three months to the end of September, found that the proportion of UK consumers who are worried about debt is down by four points to 14%, as is the number feeling negative about the state of their personal finances (58%). A quarter (25%) now say they have ‘no spare cash, compared to 32% in the previous survey.
But at the same time 32% said increased utility bills were their biggest or second biggest concern, and 28% flagged up worries about the economy, and 22% about job security. All of these worries have become more pressing since the second quarter.
British Retail Consortium director general Stephen Robertson said: "There's not much to be cheerful about here.” He said consumer confidence was barely higher than in the previous quarter and he added: “Even though this week's figures show the economy growing by 0.5 per cent, 86 per cent of people believe we are still in recession and only 11 per cent think that will change in the next twelve months.”
He said more than half were trying to save on their gas and electricity bills, and concluded: “With jobs fears mounting and no relief in sight this year, retailers are braced for a difficult Christmas."
Chris Morley, Nielsen managing director for UK and Ireland, said: "Consumer confidence stabilised in the third quarter but the high cost of petrol and energy bills continues to put pressure on already squeezed shopper budgets.
"Shoppers are remaining cautious and managing what they spend more closely, and this is leading some supermarkets to experience volume declines.
"But not all shoppers are feeling the downturn in the same way. One in four reports having to cope with having no spare cash, which suggests the downturn is impacting some people more than others.
"Overall, most shoppers remain fickle and are shifting spend towards retailers that offer the most immediate savings. But shoppers want more value - other than just cheap prices - so retailers trading purely on low price will only attract the most disloyal shoppers."