Consumer confidence driven higher by positive economic signals coinciding with a great British summer of sun and sport
25 August 2013
UK consumer confidence rose in the three months to the end of July, driven by positive signals about the UK economy.
UK consumer confidence rose in the three months to the end of July, driven by positive signals about the UK economy. This coincided with a prolonged period of hot weather and British sporting success which is likely to have affected people’s mood. However concerns about personal finances and job security remain widespread.
These are the key findings of the third edition of The Consumer Today, the quarterly report from dunnhumby and Tesco, using their unique insights to provide a detailed picture of how British consumers feel about the economy in general, as well as their own personal situation.
Covering the three months to the end of July, the report finds that overall consumer confidence has reached its highest ever point since the survey began in July 2010. Much of the improvement has been driven by more optimistic attitudes towards the country’s economy, with positive economic news leading to a marked drop in the number of people who feel the economy has declined in the recent past, and an increase in those believing it will improve in the future.
The good weather and British sporting success is also likely to have helped consumers to feel more positive about their present situation, contributing to the rise in overall confidence.
However, the report also signals a note of caution. Despite positive recent signals, a greater proportion of the population still believe that the economic outlook is gloomy rather than hopeful. Concerns about personal finances and job security remain widespread, and are particularly acute amongst lower income households.
Simon Hay, CEO of dunnhumby, said:
“This is the third of our quarterly reports measuring consumer sentiment and overall confidence is continuing on an upward trend since the last quarter. Encouraging economic signs have boosted the positive mood, but this has not translated to people’s personal financial situations, where there is still much uncertainty.”
Philip Clarke, CEO of Tesco, said:
“It’s been a great British summer of sun and sporting success and it’s encouraging to see that consumers are feeling more positive about the economy. However, the underlying picture is complex and it’s not yet clear if the recent improvements in consumer confidence are thanks to these short-term factors, or part of a more significant shift. What we do know is that consumers are continuing to look for great value and I don’t see that changing.”
The key findings of the research are:
- Overall the consumer confidence index rose from 104 to 109 in the three months to the end of July – its highest ever point for this survey, but still low compared with historic data.
- The proportion of consumers agreeing that the economic situation in the country had improved in the last few months rose from 10% in April to 21% in July. Those thinking that the economy had declined in the recent past fell markedly to 34% in July from 55% in April.
- Those believing that the economy will improve rose from 16% in April to 24% in July, while the proportion of consumers believing the economy will worsen fell from 40% in April to 28% in July.
- Whilst the proportion of the population feeling increasing pressure on their finances has fallen in recent months (from 41% in April to 33% in July), a greater proportion of the population still believe that the economic outlook is gloomy rather than hopeful.
- 16% of households rate their finances as poor or very poor. This rises to 26% for lower income households.
- Those from lower income households show greater concern and pessimism across the board at their financial situation and prospects. A greater proportion of this group think that the general economic situation has worsened (44%), a lower proportion expect it to improve (17%) and a far higher proportion rate their household finances as poor or worse (26% versus just 10% for high income consumers).
Notes to editors
Extra weather statistics if needed:
Volumes sold in May-July 2013 v same period 2012
- Barbecue ranges – up 35 per cent
- Iced lollies up 28 per cent and ice cream tubs up 6 per cent
- Electrical fans – up 75 per cent
- Garden play equipment – up 25 per cent
- Pimms – up 50 per cent
- Blueberries – up 25 per cent
Measured monthly since 2010, the dunnhumby consumer confidence tracker has a sample size of 300 customers each week. It is measured against a base of 100 set from July 2010, and is an authoritative barometer of how UK shoppers are thinking and feeling. This is the third edition of the Consumer Today report which is based on the tracker above. For full methodology, please refer to the report available here.
For more details contact:
dunnhumby press office: Ruth Wembridge 020 8832 9830
OR Tesco Press Office 01992 644645.
dunnhumby is the world’s leading customer science company. We analyse data and apply new insights from more than 400 million customers across the globe to create better customer experiences and build loyalty. Our insights and strategic process help clients create competitive advantage and enjoy sustained growth. dunnhumby employs more than 2,000 employees in offices throughout Europe, Asia and the Americas, and serves a prestigious list of companies including Tesco, The Kroger Co., Coca-Cola, Macy’s, Procter & Gamble, PepsiCo and Shell. For more information, please visit us at www.dunnhumby.com.
Tesco is one of the world’s largest retailers with operations in 12 countries, employing more than 500,000 people and serving millions of customers every week.