Following November’s notable improvements in consumer confidence, GfK’s latest study shows a slight 1-point climb to -17 in December. Although confidence remains brittle, there is room for optimism as we head into the tail end of the November – January shopping boom. That is according to the Consumer Confidence Barometer, which has aimed to understand consumers’ willingness to spend money since 1974.
The confidence consumers have in both their personal financial stability and broader economic situation can sway how much they spend with brands. This is as consumers who lack confidence will not only look to purchase fewer products or services but also require more work to convert into customers and rely on a higher level of discounting.
Key takeaways from the study:
- Overall consumer confidence improved by 1-point to -17, which represents a 5-point climb compared to December 2023.
- Following a stark increase in November, the Major Purchase Index has remained stable at -16. This is again a notable improvement on December 2023, when this measure sat at -23.
- The study revealed a growing confidence in personal finances over the past 12 months with a 2-point climb to -7 in December. This is 7-points higher than in the same month of 2023.
- Confidence in the general economic situation over the past 12 months remained the same as in October at -39. Although no movement has been seen month-on-month, this measure is 5-points higher than in December 2023.
The impact on brands:
- With November’s results seeing brands sharing a sigh of relief, December’s results support continued optimism throughout the crucial months of November – January.
- Although consumer confidence has climbed year-on-year, it remains brittle as inflation begins to climb again. Should this trend continue, consumers are likely to become stricter on how and where they spend their money.
- This study offers the clearest view of confidence at the tail end of the November – January shopping boom. January’s results will provide a final view of whether consumers remained confident throughout January following high expenditure in December and climbing inflation once again.
Analysing a single months worth of data provides limited insight, but analysing several months can indicates 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.
