Consumer confidence down in UK after Brexit
A popular market research survey in Britain measuring the mood of consumers after the country chose to opt out of the European Union in the June 24 referendum, found that confidence level among the consumers had dropped by eight points – the lowest in 21 years (December 1994).
Between 30 June and July 5, market research organization GfK conducted a special one-off Consumer Confidence Barometer (CCB) to measure the post-referendum mood and found that the core Index has fallen 8 points to -9.
So uncertain are people about their future on the economic front that all of the four key measures used to measure the core index have fallen in less than 10 days since the outcome of the historic referendum, GfK analysts said in a press release.
“We've seen a very significant drop in confidence, as is clear from the fact that every one of our key measures has fallen, with the biggest decrease occurring in the outlook for the general economic situation in the next 12 months, ” said Joe Staton, Head of Market Dynamics at GfK.
The measures used to gauge consumer feelings were general economic outlook in the preceding 12 months and succeeding 12 months, personal financial situation in the last 12 months and perception of the next 12 months, purchase and savings index.
Only the savings index, which was not used to calculate the core index, was up by 4 points, while the purchase index was down by 12 points indicating that the proportion of people who think that now is not the time to spend as gone up significantly.
According to the CCB, six in 10 (60 %) people expect the general economic situation to worsen over the next 12 monthscompared to
46 % who thought so in June. Only 20 % of consumers expect it to improve, compared to 27 % before the referendum.
The proportion of people who think prices will increase rapidly during the coming year jumped 20 % points from 13 to 33 %.
The biggest drop in confidence, from an income perspective, is a fall of 16 points among households with income levels of £25,000-£49,999.
Splitting the core Index result by how people said they voted in the referendum, Remainers were at -13, versus Leavers who were more optimistic at -5, GfK observed in the press release.
The GfK analysis suggested that in the immediate aftermath of the referendum, sectors like travel, fashion and lifestyle, home, living, DIY and grocery were particularly vulnerable, as consumers tend to cut back their discretionary spending.
Also, as in previous periods of uncertainty, consumers would tend to turn to well-known brands they loved and trusted as a guarantee of quality and value for money.
Thus, now is the time for companies to understand and respond to consumer concerns by anticipating and meeting their needs, GfK said in the release. (SH)
Fibre2Fashion News Desk – India