Economic Fears Haven't Diminished Consumer Confidence: Nielsen
While concerns about the economy have overtaken fears of terrorism and immigration, it hasn't diminished consumer confidence in the UK, according to a report from data company Nielsen.
Its most recent Global Survey of Consumer Confidence and Spending Intentions showed that dismay over the economy had risen throughout 2016 to 12 percentage points, to reach 28%.
Anxiety over political stability had the next-highest leap, rising eight points to 10% – five times higher than at the end of 2015.
Concern about rising food prices (+2%) and fuel costs (+5%) were also on the list.
The British Consumer Confidence Index finished last year with a positive ranking of 102 – one point higher than the year before, and much higher than the European average of 81.
Britain was fourth on the list of most confident countries, behind Denmark, the Czech Republic and Switzerland, dropping from the second-place position that it held a year ago.
Despite Brexit, consumer sentiments in regards to personal finances, spending goals and cutting costs were more positive at the end of 2016 than at the start of the year, barring feelings toward job outlook.
Fifty-three percent (53%) of Britons were optimistic about making purchases – the highest level on record.
Times Remain Good
“As the political and economic planning for Brexit gets under way, concerns about jobs leaving the UK have unsettled consumers, as did the US election,” said Steve Smith, managing director of Nielsen UK and Ireland.
“However, times generally remain good for British consumers, with strong employment and wage growth that rose slightly ahead of price inflation during the last year.
"In addition, disposable income remains stable, while tax benefits for the lower-paid and a rise in the minimum wage have reduced income inequality. As a result, consumer spend continued to be the engine of UK GDP growth in 2016.”
The percentage of UK residents who switched to discounters like Lidl or Aldi to save money in 2016 reached its second-lowest level on record (22%).
Smith was wary of a continuation of this trend, due to rising inflation affecting commodities such as petrol, and warned that he expects to see price hikes for essentials and cases of 'shrinkflation', such as the diminishing size of the Toblerone, as retailers try to avoid passing the effects of price increases onto consumers.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up to ESM: The European Supermarket Magazine.