As the festive season nears, consumer confidence remains fragile, influenced by economic uncertainties.
- The British Retail Consortium’s Consumer Sentiment Monitor shows mixed feelings regarding personal finances.
- Despite a slight positive shift in personal financial expectations, worries about the broader economy deepen.
- Retail spending sees minimal growth, aligning with consumer preparations for Christmas.
- Concerns over future inflation and increased retailer costs remain heightened.
The British Retail Consortium (BRC) has reported that as Christmas approaches, there is a noticeable hesitance among consumers, marked by mixed expectations about their personal finances and the overarching economic climate. Data from the BRC’s Consumer Sentiment Monitor, which surveyed 2,000 UK adults in mid-November, revealed only a slight improvement in personal financial expectations, moving from -4 in October to -3 in November. However, this minor positive change was overshadowed by a more pronounced pessimism regarding the broader economy, with expectations decreasing from -17 to -19 in the same period.
In spite of these concerns, there was a small increase in personal retail spending, rising slightly to +3 in November from +2 in the previous month. Overall, personal spending levels remained steady at +17, reflecting a stable but cautious spending attitude among consumers. Personal saving expectations showed no change, maintaining a negative outlook at -9.
According to BRC CEO Helen Dickinson, ‘There was little shift in consumer confidence since the Chancellor’s Budget, with many worried about the economy in the lead up to Christmas.’ She added that while there was a minor improvement in personal financial expectations, broader economic concerns persisted. Dickinson noted, ‘Personal retail spending remained positive, edging up slightly, though this was to be expected as consumers prepare for the festive season.’
Retailers face additional pressure from rising costs associated with the Budget, with over £7 billion in extra expenses anticipated for 2025. This financial strain, compounded by potential inflations in food prices, has led retailers like Tesco, Sainsbury’s, Next, and Amazon to caution that absorbing these costs could prove challenging, potentially leading to increased prices or reduced investment in jobs and infrastructure.
The retail sector is calling on the government to ensure that planned reforms to the business rates system in 2026 provide significant financial relief. Without meaningful changes, the industry fears that the cumulative cost pressures could stifle growth and limit consumer spending power during this critical retail period.
The current economic apprehensions coupled with upcoming financial pressures pose a significant challenge to consumer spending as Christmas approaches.
