Retailers could face a turbulent few months as consumer confidence fell significantly in September amid the government’s gloomy warnings, a new survey has found.
The British Retail Consortium has reported that households’ assessment of the general economic situation over the next three months has slumped this month.
People are also more worried about their personal financial situation, following heavy hints from Downing Street that October’s budget will include tax rises.
The BRC’s measure of households’ assessment of the general economic situation over the next three months sank to -21 in September from -8 in August.
Older people’s confidence in economic outlook has taken a particular blow, the BRC says – perhaps a sign of the damage caused by the cuts to winter fuel payments for pensioners.
According to BRC-Opinium data, consumer expectations over the next three months of their:
- Personal financial situation worsened to -6 in September, down from +1 in August.
- State of the economy worsened significantly to -21 in September, down from -8 in August.
- Personal spending on retail, improved slightly to -8 in September, up from -9 in August.
- Personal spending overall fell to +10 in September, down from +11 in August.
- Personal saving fell to -9 in September, down from -4 in August.
Helen Dickinson, Chief Executive of the British Retail Consortium, said,
“Retailers could face a turbulent few months as consumer confidence fell significantly in September. Negative publicity surrounding the state of the UK’s finances appears to have damaged confidence in the economic outlook, particularly among older generations.
"Despite this, expectations for future retail spending, while negative, did not yet appear to have been adversely affected, with many consumers expecting to reduce the amount they save instead.
“The Budget is a key opportunity to inject some confidence back into the economy, boosting spending and helping to foster much needed investment by businesses. The broken business rates system is currently holding back investment in jobs and communities across the retail industry.
"By introducing a Retail Rates Corrector - a 20 per cent adjustment to retail property rates bills – the Chancellor could help drive investment in local high streets and communities, creating jobs and boosting consumer confidence.”