Two thirds of UK households are looking to cut back on retail spending, according to a new poll tracking consumer sentiment by retail research agency Conlumino.
The study found that while confidence picked up slightly in May, the public’s view on the economy remains highly negative and many people are looking to rein in spend.
- Well over half of the public (58%) believe the UK economy will get worse over the next six months; less than one in 10 think things will improve. In April 2012 the figure thinking things would get worse was 59%
- 39% of households believe heir own personal financial situation will deteriorate over the next six months, 51% think it will remain about the same while just 10% think things will improve
- Some 64% of consumers say they are planning to cut back on retail spending over the next six months, with just 4% saying they plan to spend more. Of those cutting back, 17% say their cuts will be severe
- Big ticket items such as furniture (31% say they will cut spending here) and electricals (27%) are bearing the brunt of the cuts, but lower priced sectors like DVDs and books (33%) are also seeing increasing pressure
- Food is the one area where a large number of consumers expect to spend more; partly because of continuing price inflation and partly because of the Jubilee and other summer celebrations
Neil Saunders, managing director of Conlumino, said: “Pessimism about the economic outlook is one of the retail sector’s greatest enemies.
“A gloomy view of the future encourages even households with healthy finances to cut back. As important as it is to be realistic times are far from easy, we need to do a much better job of injecting some positivity into the consumer psyche.
“As bad as these numbers are, we expect the June results to show a slightly more positive outlook as a result of the feel good factor around the Jubilee celebrations.
“That said, there seems to be little prospect of a dramatic improvement in the results any time soon; consumer confidence is likely to continue to bump along the bottom for some time to come.”