Retailers need an unambiguous outcome to the general election to offer consumers the clarity they need to unlock confidence and spending.
Consumer confidence has flatlined at -14, marking almost four years in negative territory and with only a clear result in the general election likely to offer retailers a pre-Christmas boost.
GfK’s monthly consumer confidence index is flat compared to October and down one point compared to November 2018. People’s feelings about their personal financial situations over the past 12 months, and the general economic situation over the past 12 months, have both fallen by one point compared to last month.
The major purchase index, a key sign of whether consumers are gearing up to make big purchases, is also down one point month over month to zero. However, it is up three points compared to this time last year.
GfK’s client strategy director, Joe Staton, tells Marketing Week that the general election has thrown up an “unprecedented distraction”, but that its outcome could be crucial to the high street. A clear outcome should benefit retailers, while a hung parliament would do the opposite.
“The outcome of the election is critically important for consumer sentiment because it is an opportunity to offer clarity that could – and should – benefit the high street,” he explains.
“Consumer views on their personal finances are static and people still have poor perceptions of what the wider economy can do for them. Consumer confidence needs to be liberated and an unambiguous election result might just do the trick.”
People’s perceptions of the economic situation remain strongly negative, with feelings over the past 12 months and next 12 months at -34. However, consumers are becoming more positive about the next year, with the measure up three points compared to October.
Consumers feel more positive about their own financial situation, although at zero for the past 12 months, and just one for the next 12, both are barely avoiding negative territory.
Staton concludes: “While many issues are under the spotlight in this election, political parties will need to satisfy voters that they will be effective for the wider economy and that, as a consequence, people will be better off next year and beyond.
“Consumers need to be convinced they will be able to balance their personal accounts beyond ‘just about managing’. Fantasy economics alone will not guarantee votes.”