With less than 50 days to go until UK citizens decide whether to remain in the EU with a historic vote on June 23rd, it was revealed last week that concerns over how this might effect our economy have had a considerable effect on consumer behaviour. Brexit anxiety is being blamed for a drop of 3 points to -3 – pushing consumer confidence levels into negative territory for the first time since January 2015.
Consumer Confidence Index figures released by GfK show that consumer confidence levels are down by 7 points year on year and that this decline in confidence is reflected across all of the different measures that they use to calculate the index. It appears that mixed messages over what might happen whether we stay in or leave the EU are having a considerable impact on both consumers and retailers.
Speaking to Retail Week, Joe Staton, head of market dynamics at GfK explained the effects of this uncertainty:
“Mixed messages about a post-Brexit world and the ongoing Eurozone crisis are casting a cloud over our economy.
“The biggest dent to confidence comes from consumers’ depression about the general economic situation in the UK for the next year, dropping 20 points in 12 months. Against this backdrop, even faith in our personal economic fortunes has taken a battering contributing to the overall fall in the numbers.”
Unsurprisingly, confidence in the UK’s economic situation in general has also slumped and now stands at -14 which is 17 points lower than it was this time last year. However, shoppers are more optimistic about their own finances – these have only dipped 1 point to +3 which is 3 points higher than it was this time last year.
Staton suggests that these figures help to give a bigger picture of what’s really going on:
“Trends in confidence show our degree of optimism about the state of the economy and this indicator will make for interesting reading between now and the EU referendum on June 23.”
Whether you’re in or out , the uncertainty of what might happen to the economy – particularly if we leave the EU – is clearly having an effect on consumer behaviour. So where does this leave retailers? Preparation is key – by analysing these trends and planning for a variety of possible outcomes with a flexible and responsive retail strategy they should be able to weather any potential economic storms.