Two-thirds of UK consumers changing habits to save money, Nielsen reports

Following two successive quarterly rises, UK consumer confidence fell back three points to 84 in the final quarter of 2013, according to the latest report from Nielsen. In the previous quarter, consumer confidence hit a six-year high of 87.  

The UK figure now stands midway between the global index of 94 and European index of 73. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

The report also shows that after seven consecutive quarters of relaxing their purse strings, UK consumers are once more starting to think twice about spending. Since Q4 2011, the percentage of Britons changing their habits to save money steadily fell from 74% to 63%, in Q3 2013. However, this declining trend has been checked with a small rise to 65% in Q4 2013.

Despite this small rise, the proportion of Britons who believe the UK is in a recession dropped to 71% – its lowest level for almost six years (Q1 2008, 64%).  Also, the proportion of those believing the UK will be out of a recession within a year increased to 22%, the highest level since Q1 2010 (29%).

The most common tactics used by Britons to reduce costs are: saving on gas and electricity (60%), spending less on new clothes (58%), cutting down on takeaway meals (57%) and switching to cheaper grocery brands (55%).

 unnamedE.g. in Q4 2013, 60% of consumers who changed spending habits to save money did so by saving on gas/electricity  
Nielsen group managing director for UK & Ireland, Chris Morley, said: “It’s hardly surprising, the number one target for cost-cutting is energy. Ofgem recently revealed the average annual household dual-fuel bill was £1,315, while almost 1.1 million Britons visited uSwitch online in December.”

Rising utility bills are, far and away, the biggest worry for UK households, with 37% of consumers saying it was their greatest concern, almost twice that of the next biggest concern – the economy (20%). Together with Germany, consumers from the UK are the most concerned about rising energy bills throughout all 32 European countries measured in the report.

Aggregate consumer confidence
The UK consumer confidence index of 84 still compares favourably with most of our European partners. The German index rose three points (to 95), Spain (56) rose two points, Italy (44) dropped three points while France (61) dropped 10 points. 

Morley again: “The last couple of quarters have seen a steady upswing in UK consumer confidence but the end of 2013 provided a reality check and a reminder we face a long and gradual road to economic recovery.

“British consumers are increasingly recognising improvements in the economy, but they are still cautious and likely to continue to modify their buying and consumption habits to save money. This is in stark contrast to confidence levels in Germany, for example, where consumer cost cutting is almost half the level it is here.”

The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns and spending intentions each quarter among more than 30,000 internet consumers in 60 countries.