Consumer confidence plummets at sharpest rate in 21 years after Brexit

Customer sentiment tumbled eight points between June 30 and July 5, according to a one-off GfK Consumer Confidence Index measuring the immediate impact of the UK’s vote to quit the EU.

All measures used to calculate shopper optimism plunged following the Brexit vote, driving the overall score down to -9 overall and marking the sharpest decline since December 1994.

Confidence in the general economic outlook over the next year recorded the steepest drop, down 13 points to -29, followed by shoppers’ likelihood to buy big-ticket items, which fell 12 points to -3.

GfK’s head of market dynamics Joe Staton said: “During this period of uncertainty, we’ve seen a very significant drop in confidence, as is clear from the fact that every one of our key measures has fallen, with the biggest decrease occurring in the outlook for the general economic situation in the next 12 months.”

Gloomy outlook

Customer confidence in the economic situation over the last 12 months dropped six points to -19, while shoppers’ outlook in their personal finances over the next year fell six points to +2 and confidence in their personal finances over the last year dipped three points to +3.

Consumers in the North of England recorded the steepest drop in confidence overall as sentiment plummeted 19 points, followed by shoppers in Scotland who recorded an 11 point drop in confidence overall.

Shoppers in London and the South of England reported a two-point drop in confidence.

“In the immediate aftermath of the referendum, sectors like travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending,” said Staton.

“As we’ve learnt from previous periods of uncertainty, consumers turn to well-known brands they love and trust as a guarantee of quality and value for money.

“Now is the time for companies to understand and respond to consumer concerns by anticipating and meeting their needs.”