A CBI survey, based on post-Christmas sales, has revealed that consumer confidence is the lowest for a year, with “weak demand and consumer uncertainty” holding back spending.
“As the government warns of tough times ahead, it is little surprise that the public have caught the January blues,” comments Helen Dickinson, chief executive of the British Retail Consortium (BRC). “Consumer confidence in the economy fell to a new low, with concerns most pronounced among older generations. Gen Z (18-27) remain the only group to expect the economy to improve, while two-thirds of Boomers (60-78) expect things to get worse. Feelings around people’s own finances fell slightly, with older generations remaining the most pessimistic. Expectations of retail spending and wider spending both fell significantly, though much of this is likely to be the end of the Christmas period, as people tightened their belts for the new year ahead.”
The BRC adds that on top of this challenging market backdrop, retailers are facing £7bn in additional costs from the Budget and new packaging levy. With tight margins leaving little scope to absorb more costs, many retailers are warning of price rises and job cuts in the coming months. To mitigate this, and shore up investment in shops and entry level jobs, the BRC says that the government must ensure that no shop ends up paying a higher business rates bill because of its proposed reforms.
In recent days, Sainsbury’s has announced it will be cutting 3,000 jobs, WH Smith has confirmed it will be closing down its high street stores, and Lakeland is looking to put the business up for sale having called in advisers.
Top: Post Christmas, consumer confidence has dipped.
