Consumer Sentiment Monitor - August 2024
Report Excerpt
Dr Kris Hamer | Director of Insight | British Retail Consortium
“Consumer sentiment towards the UK economy became more pessimistic in August, with a third of consumers anticipating a worsening economic outlook over the next three months, while only a quarter expect improvement. This negativity is particularly evident among older generations, who, given their higher likelihood of having substantial savings, are more concerned about the recent Bank of England decision to lower the base rate and its potential negative impact on their finances.
On a more encouraging note, consumers' views on their personal finances have remained relatively stable, with a slight increase in those feeling they are ‘coping’ and a decrease in those who say they are ‘struggling.’ This indicates that while concerns about the broader economy persist, many individuals are finding ways to manage their personal financial situations effectively. For retailers, this presents an opportunity to target products and services that cater to those looking to maintain or improve their financial resilience. The divergence between overall spending plans and anticipated retail spending is particularly telling, with consumers continuing to prioritise dining out and leisure travel over traditional retail purchases.
Additionally, the public disorder at the start of August influenced consumer behaviour, with three in ten indicating they have or will change their movements when commuting, shopping, or using public transport, particularly when visiting cities or towns outside their local area.”
Overview
The BRC Consumer Sentiment Monitor looks at consumer perceptions on the state of the economy, personal finances, spending and saving expectations, and engagement in sustainability behaviours. Our consumer tracker provides invaluable insights about changes in consumer sentiment.
The results for August 2024 reveal:
- August brings an increase in pessimism towards the future of the UK economy over the next three months. A third believe things will worsen and just a quarter believe things will improve.
- State of personal finances remain highly consistent since July but reveal a slight improvement. Three month expectations also remain much the same since the July.
- Debt levels stay similar to July, with half (49%) having some form of debt. Overall borrowing expectations for the next three months lower slightly.
- Overall spending plans reveal an increase, with this increase seen across all generations. Gen Z and Millennials continue to be the most likely to spend more. However, looking specifically at retail spend, consumers are more likely to expect spending less.
- In line with increased spending, overall savings expectations lower this month.
- Consistent with previous months, buying cheaper products, reducing leisure spend, and purchasing less items overall are the most popular ways to reduce outgoings for those looking to do so.
- Top non-essential spending priorities remain as dining out and travelling for leisure. However, fashion and clothing overtake home improvements to the third spot.