Wolfson: Recession won't knock consumer confidence

Next chief executive Lord Wolfson has shrugged off fears that the double-dip recession will hit consumer confidence and believes adjusted GDP figures could show growth.

Along with some economists, Wolfson thinks last week’s ONS figures, which showed that the UK had slipped back into recession after the economy shrank in the first quarter, are likely to be revised upwards when they are reviewed in the coming weeks.

Wolfson, speaking as Next revealed total sales up 1.4% in its first quarter, said GDP numbers were “often revised and I expect these ones will be”.

Wolfson said he was not concerned about the term ‘recession’ impacting consumer confidence. He said: “I don’t think the British consumer acts like that. The fact that we’re officially in recession doesn’t stop people buying trousers. They look at what’s in their bank and the price of petrol for their cars.”

Wolfson expects a boost to consumer sentiment during next month’s Diamond Jubilee celebrations and said that, along with the extra bank holiday, it would help boost Next.

Single-price point retailer Poundland’s chief executive Jim McCarthy also agreed the recession would not have a dramatic impact on consumer confidence.

He said: “The consumer feels squeezed in any event. A technical double-dip doesn’t help but people feel like we never got out of the recession.”

The views contrast with those of other retail chiefs, including Waitrose boss Mark Price and Theo Paphitis, who told Retail Week they feared the return to recession could knock fragile confidence further.

An ICM poll for Retail Week supports such concerns. The survey showed more than half (54%) of consumers intend to spend less as a result of the slip into recession.

The data also revealed that 52% of consumers are more worried about prospects for themselves and their family.

Last week the ONS revealed the economy shrank 0.2% in the first quarter of this year, following a 0.3% slip in the final quarter of 2011.

• Read more about the Diamond Jubilee here