Consumer Sentiment Monitor - July 2024

Dr Kris Hamer | Director of Insight | British Retail Consortium

“Following a dip in consumer optimism towards the UK economy in June, the latest results reveal a strong uplift in July, with a 9 percentage points increase in consumers expecting the economy to improve over the next few months. Pessimistic responses decreased across all generations, particularly among the Gen X group. There was also a more favourable outlook towards personal finances this month, with a 3 percentage points increase in consumers expecting an improvement over the next three months.

Consumer spending plans over the next three months saw little change overall, with those expecting to spend more dropping slightly from the previous month. However, Gen Z consumers showed a strong increase, with almost half planning to spend more, overtaking Millennials. Saving expectations improved due to fewer consumers expecting to save less than the previous month. Among those planning to reduce spending, top strategies include buying fewer items and cutting down on leisure activities.​

This month, we also surveyed parents about financial pressures during the school holidays and found that 40% expect increased financial strain, mainly due to higher grocery bills and spending on days out with their children.​

The resurgence in consumer optimism in July is a positive sign for the UK economy, reflecting growing confidence. This suggests that consumers are becoming more resilient and hopeful about the future, which could boost economic activity. Retailers that stay adaptable and responsive to these changing consumer behaviours will maximise opportunities and drive customer loyalty."

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 July 2024 reveal:

• Positivity towards the future of the UK economy showed a strong uplift in July, with optimistic responses increasing by +9%, and pessimistic responses reducing by -6%.
• Financial situations remain consistent with two fifths (40%) reporting being comfortable, a further two fifths (40%) are coping, and one fifth (19%) are struggling.
• Overall debt levels dipped slightly to 48% this month. Millennials continue to be the most likely group to have debt.
• Spending plans over the next three months stayed largely the same. Overall plans to spend more dropped slightly to 25%, however Gen Zs experienced a strong increase and overtook Millennials as nearly half plan to spend more.
• Expectations to save improved this month as there is a decrease in the number of those expecting to save less.
• Similar to previous months, buying cheaper products, reducing leisure spend and purchasing less items overall are top ways to reduce outgoings for those looking to do so.
• Non-essential spending priorities remain as dining out (36%), travelling for leisure (35%) and home improvements (25%), although going out to bars (23%, +2%) and electronics and gadgets (18%, +3%) experience small uplifts since June.
• Since breaking up from school holidays, two fifths of parents expect more financial pressure, driven by higher spend on days out and groceries.