Consumer confidence edges to near-record lows

The latest Deloitte Consumer Tracker found that all measures of confidence were below year-on-year comparisons, with the exception of personal finances,  with ‘health and wellbeing’ and ‘children’s education and welfare’ categories reaching historic lows.

Deloitte’s analysis, based on responses from more than 3,000 UK consumers on 1-4 January 2021, finds that the extension of some major government and private sector income-support measures – such as the furlough scheme and payment holidays on loans, mortgages and credit cards – boosted confidence in personal finances, improving sentiment in the fourth quarter.

While overall sentiment on levels of household disposable income was flat in the fourth quarter of 2020, at -17%, it remains a percentage point higher than the same time last year.

Ben Perkins, head of consumer research at Deloitte, said: “As a result of the pandemic, many consumers shopped online for the first time and the experience has opened eyes to the convenience and choice digital technology can offer. Retailers should now be asking how they can retain these new customers.

“That being said, for many shoppers buying online will never fully replace the experience of visiting a store and the pandemic has exposed some truths that the high street of the future will need to acknowledge and respond to longer-term behavioural change. For now, after a year of disruption, many of these shifts in consumer behaviour will be engrained and it should not be assumed that consumers will simply revert to their pre-Covid-19 shopping habits.”