With uncertainty surrounding both the UK Government’s budget and the US presidential election behind us, consumer confidence has seen a sizeable three point climb to -18 in November. That is according to the Consumer Confidence Barometer, which has surveyed consumers to understand their willingness to spend money since 1974.
The level of confidence consumers have in their personal financial stability and wider economic situation can influence how much they spend with brands. This is as low confidence consumers will not only seek out fewer products or services, but also take longer to convert into customers and expect a greater level of discounting.
Key takeaways from the study:
- Overall consumer confidence climbed to -18, representing a 3-point improvement since October’s results.
- Consumers are showing a greater willingness to make high value purchases with the Major Purchase Index climbing by 5-points to -16. This measure now matches that seen in November 2023.
- Consumers’ confidence in their personal financial situation over the past 12 months has improved by a subtle 1-point to -9. Although not a significant month-on-month change, this measure is 7-points higher than in November 2023.
- Confidence in the general economic situation over the past 12 months has improved by 3-points since October at -39. This represents a starker 10-point climb when compared to November 2023.
The impact on brands:
- With Black Friday just days away, improvements in consumer confidence will be welcomed by brands. Whilst discounting is inherent to Black Friday, it may provide brands with confidence to reduce prices by a less significant percentage than they may have planned.
- Brands who sell high-consideration, high-cost products or services may find the months ahead easier with the Major Purchase Index seeing notable improvements. This includes brands selling furniture, electricals, and more.
- This study provides brands with the clearest view of confidence as we head towards Black Friday. It also provides a more accurate view of confidence during the peak shopping period of November – January, although December’s results will provide greater insight.
Although a single month’s data offers limited insight, analysis of several months can indicate the challenges brands will face in the future. We will continue to publish further articles when updates of the GfK Consumer Confidence Barometer are made available.
