Concerns over job losses plague consumer confidence

Shopper sentiment stayed at -27 in August, according to the GfK Consumer Confidence Index, down from -14 in the same month in 2019. 

People’s thoughts about their personal financial situation over the past year dropped slightly to -5, down one point on the previous month and four points lower than August 2019.

Consumer confidence in the general economic situation also declined by one point for both the past 12 months and looking ahead to next year, to -62 and -42 respectively.

Sentiment over the next 12 months inched up by one point to +1, which is one point lower than August 2019, as consumers use the Eat Out to Help Out scheme and continue to receive government furlough.

The major purchase index increased by one point to -25 in August, 26 points lower than last year, while the savings index stayed the same at +21.

GfK client strategy director Joe Staton said: “Circumspect consumers report they are more confident about their personal financial situation over the next year, but the uptick from zero up to +1 does not amount to much, and this can change quickly when furlough ends and the inevitable redundancies start.

“Employment is now the big issue because the pandemic has ended years of job security. Yes, discounted dinners have proved a winner with hungry consumers across the country this month, but it’s difficult to see any increased appetite for other types of spending for now.

“While our major purchase index managed to increase by one point in August, the economic headwinds are not favourable as we enter the key retailing months at the end of the year.”