The British Retail Consortium indicates consumer confidence remains low as the festive season approaches due to economic concerns.
- Latest data from the BRC shows slight improvement in personal financial expectations, yet ongoing anxiety about the broader economy.
- Personal retail spending has increased modestly, indicating some resilience in consumer activity despite economic fears.
- Retailers anticipate over £7bn in additional costs, urging government intervention to alleviate fiscal pressures.
- Rising concerns about inflation, especially in food prices, may impede holiday spending plans.
The British Retail Consortium (BRC) highlights persistent economic anxieties among consumers as the festive period nears, impacting overall confidence levels. Despite slight improvements in personal financial expectations, which nudged up from -4 in October to -3 in November, worries about the wider economy have intensified, with scores dipping from -17 to -19. This data stems from a survey of 2,000 UK adults conducted between 12 and 15 November.
Personal spending on retail showed a modest rise, climbing from +2 in October to +3 in November, as consumers began preparations for the holiday season. Overall personal spending remained stable at +17, replicating October’s findings, while anticipations for savings held steady at -9. BRC’s CEO, Helen Dickinson, emphasized the lack of significant shifts in consumer sentiment post-Chancellor’s Budget, pointing to a tension between marginally improving personal financial outlooks and escalating concerns over the economy.
Non-food spending expectations remained low, whereas an uptick in spending on dining out highlights a shift in consumer priorities, reflecting social interactions during the holiday period. However, retailers are faced with daunting economic pressures on the horizon. The BRC warned this week of potential spikes in food inflation due to rising operational costs, with over 70 major retailers voicing concerns about inevitable price hikes impacting inflation.
Retailers are expected to confront up to £7bn in additional costs in 2025, a consequence of the new Budget. This scenario likely necessitates higher consumer prices or reduced investment in staffing and infrastructure, unless mitigated by planned reforms to the business rates system in 2026. This fiscal climate further complicates the seasonal economic outlook, placing additional strain on both retailers and consumers.
The delicate balance between consumer confidence and economic challenges continues to make Christmas spending a concern.
