Today in Retail: Can we expect a spending slowdown?

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Concerns over fragile consumer confidence have been flagged in many a retailer’s results this year – and the latest GfK data summed up why.

Shopper sentiment plummeted this month, today’s data showed, as confidence slumped five points to -8.

Of the five index measurements used by GfK, optimism surrounding the general economic situation dropped most dramatically – by a whopping 25 points year-on-year.

But things may not be all doom and gloom.

With confidence in personal finances remaining positive, will consumer spending be impacted?

The sales success that the likes of John Lewis, Dixons Carphone and The Hut Group reported on Black Friday would suggest not, with a total of £1.23bn spent online alone according to IMRG – and the latest Asda Income Tracker revealed that the average disposable income for UK households climbed above £200 per week in October.

Consumers’ tendency to treat themselves and trade up over Christmas is almost certain to continue, so any noticeable impact on spending may not emerge until next year – when Cebr economist Kay Neufeld warns that price rises will “become visible in other product categories” besides fuel.

It seems any slowdown in spending is likely to be the cause of a New Year hangover for retailers, rather than sparking a nightmare before Christmas.

Quote of the day

“Despite recent strong retail sales, we are reporting a sharp -9 point drop in the Major Purchase Index this month and this will be an acute concern for retailers as they gear-up for the key Christmas selling period”

Joe Staton, head of market dynamics at GfK