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UK consumers to cut spending in January

Dec 31, 2024 United Kingdom

UK retailers could be bracing themselves for a squeeze in consumer spending due to a sharp fall in expectations about the country’s economic situation, according to the British Retail Consortium

While expectations regarding the personal financial situation remained at minus three in December, the same as in November, expectations regarding the economic situation deteriorated to minus twenty-seven, compared with minus nineteen in November. These are figures from the latest BRC-Opinium data, which measures consumer expectations for the next three months.

The data also shows that the widening of this gap was accompanied by a fall in expectations for personal spending on retail to minus three in December from three in November and a fall in overall personal spending to eleven in December from 17 in November. Meanwhile, expectations for personal savings increased to minus five in December from minus nine in November.

“Public confidence in the state of the economy took a nosedive, falling 8pts to -27. This created a widening gap between expectations of the economy and of people’s own finances, which remained unchanged. Perceptions were heavily skewed by age, with 18- to 35-year-olds considerably more upbeat than older generations on both questions. The public’s spending intentions – both in retail and beyond – dropped 6pts, with expectations of spending in nearly every retail category falling”, summarised Helen Dickinson, Chief Executive of the British Retail Consortium.

Dickinson added, “If these expectations are realised, retailers could find themselves facing a New Year spending squeeze just as they unveil their January sales” and called for government support to mitigate the impact of proposed business rates on the 2025 budget, as they are expected to increase costs.

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United Kingdom Confidence Customer Economy Organisations Retail