Optimism grows for UK economy, but concerns about personal finances and job security persist
28 November 2013
Renewed optimism about economic growth, but lower income consumers are yet to see improvements in their personal finances
Optimism about the future direction of the UK economy continued to grow in the three months to the end of October, driven by improving macro-economic indicators. Following the hottest summer since 2006, and a drop in unemployment and inflation, for the first time this survey shows more people now believe that the UK economy is set to get better than get worse. However, concerns about job security and personal finances persist amongst lower income households, meaning that the increased optimism about the broader economy is yet to be reflected in consumers behaviour.
These are the key findings of the fourth 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 October, the tracker shows that overall consumer confidence peaked in August – reaching its highest ever point since the survey began in July 2010. The improvement has been driven by increased levels of optimism towards the country’s economy, with more people now believing it will improve in the coming months (36%) compared to those who feel it will get worse (25%).
However, despite this positive overall movement, a closer look at lower income households reveals that more than half of this group feel the general economic situation is poor, and two thirds rated the employment situation in October as poor – an indicator that economic gains are yet to filter down to this group.
Simon Hay, CEO of dunnhumby, said:
“The past quarter has seen overall consumer sentiment reach its highest point since July 2010, with confidence rising consistently through the summer. However, although consumers are feeling more positive about the direction in which the overall economy is moving, it is evident that many are still feeling the pinch in their personal circumstances. This is particularly evident amongst lower income families who still share a less optimistic view of times ahead.”
Philip Clarke, CEO of Tesco, said:
“While it’s good news that more consumers are starting to feel positive about the economy, many households continue to feel pressure from rising costs elsewhere and are therefore unable to see any personal gain. Our job is to offer great value across all budgets and help parents get the best choices for their families.”
The key findings of the research are:
- More consumers now believe the economy is going to get better than those who believe it will get worse, with 36% seeing it heading in a more positive direction.
- Overall the consumer confidence index rose from 109 to 120 in the three months to the end of October – hitting 123 in August - the highest ever point for this survey.
- Overall people were more willing to state confidence with their current financial situation and employment prospects (up from 19% in July to 28% in October)
- The gap between those feeling that their household financial situation was improving (13%) and those feeling that it was getting worse (36%) remained relatively stable over most of the recent quarter.
- Consumers from all income levels saw a substantial rise in confidence across the quarter. High income consumers rose from 115 in July to 125 in October, low income and mid income consumers rose from 107 to 115 and 108 to 121 respectively.
- Lower income consumers continue to feel under greater pressure and are yet to see the benefits of the economic recovery in their own pockets. 33% are worried about job security, 33% are concerned about mortgage or rental payments and 53% are worried about household bills.
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 fourth edition of the Consumer Today report which is based on the tracker above. For full methodology, please refer to the report available at http://www.tescoplc.com/news
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 2,200 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.
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