Following on from September’s significant drop in consumer confidence, GfK’s long running study has reported a further drop in October. The Consumer Confidence Barometer, which has aimed to measure the willingness of consumers to spend money since 1974, saw overall consumer confidence fall by a further point to -21.
How confident consumers are in both their personal financial stability and broader economic situation can have a tangible impact for brands. This is as low confidence consumers will usually seek out fewer products or services, take longer to convert into a customer, or expect a greater level of discounting.
Key takeaways from the study:
- Overall consumer confidence fell to -21 in October, representing a further 1-point drop since September’s stark results.
- October’s results also revealed consumers had a more positive view of their personal financial situation moving forward with this measure climbing by 1-point.
- The same study showed that consumers are feeling more pessimistic about the general economic situation moving forward, with this measure dropping by 1-point.
- Contrary to the previous month’s results, October’s study showed a 2-point climb in the Major Purchase Index, indicating an increased willingness to make more significant purchases.
- With the Labour government set to outline their first budget on 30th October, the past two months results demonstrate the impact of bleak messaging and continued uncertainty on consumer confidence.
The impact on brands:
- As we race towards the most crucial period of the year for many brands, Gfk’s study suggests consumer willingness to part with their cash has been hindered. Although overall consumer confidence remains higher than in October 2023, brands can expect to work harder to capture revenue than they may have anticipated earlier in the year.
- Although only a subtle climb in the Major Purchase Index was seen, it implies that consumers are more open to larger purchases than they were in September. This is also the measure that’s seen the largest year-on-year climb of 13-points.
- It is likely that November’s study will be a more accurate indicator of consumer confidence during the peak shopping period of November – January. This is due to the interviews being carried out following Rachel Reeves budget, which will have a significant impact on confidence.
Whilst a single month’s data provides limited insight, analysis of several months can suggest 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.
