Consumer confidence takes a hit as coronavirus fears heighten

Shopper sentiment fell to -9 in March, although this marked a four-point increase year-on-year, according to figures from GfK. March 29, 2019, was the original day the UK was set to leave the EU.

However, the latest GfK monitor was compiled during the first two weeks of the month, prior to the government placed the UK into lockdown. It means a further deterioration of consumer confidence is expected in the coming months.

Consumer sentiment around personal finances during the past 12 months rose three points to +2, whereas predictions for the next 12 months decreased to +3.

Sentiment surrounding the UK’s general economic position for the past 12 months remained flat compared with February, representing a 10-point increase year on year.

Expectations for the economic situation over the coming 12 months have fallen by six points to -27. This is an improvement of nine points compared with March last year, again due to Brexit.

As uncertainty around lockdown grows, the major purchase index also declined by eight points in March, as consumers reserve their cash for essential items.

GfK client strategy director Joe Staton says: “Against the threat of a dramatic slowdown in the UK economy due to the spread of Covid-19, the Consumer Confidence Barometer has weakened by two points this month.

“Importantly, this research was carried out during the first two weeks of March, when the coronavirus was headline news but not impacting day-to-day lives of people across all UK nations to the degree we see today.

“After a run of increasingly positive numbers since last December, we’re now seeing very clear disruption. There’s a six-point drop in perceptions of the economy in the coming year, although the view of the next 12 months for personal finances has recorded a softer decrease of three points.

“The steep eight-point fall in the Major Purchase Index is worrying news for retailers across the land. While we have a long way to drop before we match the devastating numbers seen in July 2008 when the overall index score crashed to -39 points, lockdown Britain can only expect further deterioration.”