Consumer confidence has edged up to its highest level since November 2007, but many people are still concerned about the economy, jobs, bills and debt.
These are the key findings of the latest survey of consumer confidence in Great Britain, released by market research company Nielsen and the British Retail Consortium.
The Confidence Index increased for the fourth consecutive quarter. It was three points higher than when the survey was last polled in December 2009 and is 15 points higher than this time last year, when it hit its lowest point during the recession.
However, some big worries are still affecting customers. Concern about jobs is not easing. Seventy-one per cent of people said they thought job prospects over the next 12 months were ‘bad’ or ‘not so good’. That is virtually unchanged since December.
According to the survey, the economy is the biggest concern for shoppers followed by factors that directly affect household incomes. Eighty-four per cent of Britain’s shoppers believe the country is still in recession, with only 29 per cent expecting it to end in the next 12 months (up from 24 per cent in December).
Twenty-seven per cent of respondents said the economy was their biggest or second biggest concern for the next six months. This is up slightly from 25 per cent in December. Increasing utility bills came next, with 20 per cent citing it as their biggest or second biggest concern.
Next on the list was increasing fuel bills. Worries about rising fuel prices produced a five percentage point increase, to 19 per cent, in the numbers citing fuel bills as either their first or second main concern. Worries about health have increased and, after much attention during the run-up to the general election, more people cited immigration as a main concern, though these rank as sixth and eighth in the list of concerns.
“Increasing costs are coming to the fore once again, with consumers feeling the recent fuel price increases,” says Justin Sargent, group managing director of Nielsen UK & Ireland.
“We have seen food inflation increase in the last couple of months also, so we may find a situation going forward where people start pulling back on discretionary spending more as paying for the basics puts pressure on household budgets.
“For now, things are looking slightly better than they did last quarter, but confidence is not coming back in leaps and bounds.”
Stephen Robertson, director general of the British Retail Consortium, says: “A tentative recovery is underway, but it needs nurturing.
“Customers feel better than they did a year ago, but many people are still concerned about jobs, the economy and household bills.
“There’s a bit more willingness to spend than there was, but one in five say they have no spare cash and most people believe we’re still in recession.
“Economic growth is the way out of the country’s difficulties. Retail is crucial to that. To build the recovery, consumer confidence needs to be helped to improve further, not undermined.”