Jun 28, 2019
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Gloomy UK consumers suggest a tough summer ahead for stores

Jun 28, 2019

UK consumer confidence looked weak again in June with the regular GfK monthly report showing the Overall Index Score at -13. That was worse than the -10 seen during May and also the -9 seen in June 2018. And one key purchase intentions measure pointed to a tough time for retailers this summer.

UK consumers are feeling gloomy and aren't in a spending mood

Clearly, British consumers are not feeling very confident at the moment and that's hardly surprising given the political impasse around Brexit, a wave of company failures that have been dominating the headlines, and a general feeling that things aren't going to get better any time soon.

Consumers seem to be most gloomy about the overall situation of the country rather than their personal financial situations, as can be seen from wide variations in some of the measures.

Their view of the general economic situation in the last 12 months dropped by two points month-on-month to -32 and was down four points year-on-year. The same measure, but looking ahead to the next 12 months, fell four points to -33 and was down eight points compared to this time last year.

But as mentioned, when it comes to their personal finances, consumers seem to be a bit more upbeat, even if they're not actually brimming with confidence.

Their view of their personal financial situation over the last 12 months dropped four points from May to -1, but was only down one point compared to June 2018. And for the next 12 months, the measure is even in positive territory, although it's down three points at +2 compared to May, and down four points year-on-year.

But they're still not very keen on making major purchases as this index was at -2 for June, down three points compared to May and two points compared to a year ago.

Joe Staton, Client Strategy Director at GfK, said: “With all measures falling across the board this month, we revert to the Overall Index Score of -13 that we saw four times already this year. Perhaps scores clustered around -13 are to be the ‘New Normal’ for consumer confidence? 

“While UK consumers continue to remain concerned about the wider economy, over which the woman or man in the street has no control, of greater worry are the falls in the measures for personal finance. These better reflect our hopes and fears for our everyday financial futures and this, coupled with a decline in the Major Purchase Index, could point to a turbulent time for the economy over the summer months.”

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