Consumer confidence falters in run-up to festive season  

The long-running monthly figures produced by the market research company show all five of its measures were down in comparison with last month, indicating a challenging time for retailers in the run-up to the festive season.

Joe Staton, client strategy director at GfK, said: “UK consumer confidence has fallen nine points this month to -30 and takes us back to where we were in July this year.

“This sharp fall underlines that the cost-of-living crisis, and simply not having enough money to make ends meet, are still exerting acute pressure for many consumers.

“The fierce headwinds of meeting the accelerating costs of heating our homes, filling our petrol tanks, coping with surging mortgage and rental rates, a slowing jobs market and now the uncertainties posed by conflict in the Middle East, are all contributing to this growing unease.

“The timing of the sharp drop in our major purchase measure – down 14 points – will concern retailers across the land in the run-up to Christmas.

“The volatility we are seeing in consumer confidence is a sure sign of a depressed economic mood and there’s no immediate prospect of any improvement.”

Despite the sharp monthly drop, October’s figures are still better than they were in October last year, during the short-lived administration of prime minister Liz Truss.

Year-on-year figures show an increase in confidence of the general economic situation of 15 points, an increase of expectations of 29 points and an increase in personal financial situations of nine points.

A spokeswoman for GfK said there had been a big recovery in the summer months this year and that the latest fall, though steep, might be a correction.

Other analysts urged caution in interpreting confidence trackers.

Scott Logie, chief commercial officer of the consultancy Sagacity and chair of the customer engagement committee for the UK Data and Marketing Association, said:  “Retailers should be wary of bigger-picture consumer confidence trackers: they need a more granular approach in the current climate.

“Between the pandemic, interest rises, and the cost-of-living crisis, the picture of affordability has been upended in recent years.

“Even those who were traditionally impervious to such trends in the middle to high-income brackets are being squeezed and having to scale back.

“Now, retailers must sift the pan harder, really understanding customers and their behaviours, to find the gems.”