Consumer confidence remained subdued this month as it increased by one point in December, with the public still cautious about the “continuing uncharitable view on the UK’s general economic situation”.
GfK’s consumer confidence index grew by one point to -17 in December as forecasts for personal finances moved into positive figures at one to three points higher than this time last year.
Personal financial situation increased by two points over the past year to -7. The forecast for personal finances over the next 12 months is up two points to +1.
Looking at the general economic situation over the past year, the measure is unchanged at -39. Consumer sentiment is expected to stay unchanged at -26.
The major purchase index, an indicator of confidence in buying big ticket items, remains the same at -16, as the savings index dropped three points to +21.
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Consumer insights director at GfK Neil Bellamy said: “Overall, 2024 has been another year of ups and downs in consumer confidence but much less so compared with recent years. In 2024, there was an eight-point difference between the highest and lowest score. In 2023, it was a difference of 23 points, and in 2022 it was 30 points.
“Of all the major events in 2024, the UK General Election was the most impactful, with initial post-election optimism giving way to a large seven-point fall in September as consumers were spooked by government messages about the state of the economy and difficult choices to be made.
“Looking at the consumer’s willingness to spend, Black Friday 2024 delivered a vital boost to retailers. Figures from GfK’s point-of-sale data reveal a strong Black Friday sales performance with sales of technology and durables, homeware, and seasonal products up by 1.8% in value, and 7.7% in volume overall versus Black Friday 2023. Turnover in Black Friday week hit £992m, a figure that’s 110% better than the average week in 2024.”
“We will need to see robust improvements in these perceptions of the economy before we can start talking about sustained improvements in the consumer mood. In a nutshell, it’s the continuing uncharitable view on the UK’s general economic situation that’s suppressing consumer confidence.”
Last week, Frasers Group CFO Chris Wootton noted that consumer sentiment has “definitely weakened pre- and post-Budget”.
“It’s obvious to anyone on the high street that the Budget has really spooked people, and frankly, the 24/7 bad news stories around it have sort of compounded that,” he said.
His comments come as the Sports Direct owner reported it had lowered its profit expectations for the year by £25m, citing “tougher” trading conditions after half-year sales in its retail arm fell 8.4% to £2.45bn.
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