Consumer confidence in the UK: Retail

The Deloitte Consumer Tracker Q3 2019

The Deloitte consumer confidence index fell to -9 per cent in Q3 2019, one point lower than in the previous quarter and two points lower compared to the same period a year ago. Confidence is now at a level last seen in Q4 2018 and below the Deloitte Consumer Tracker’s long-running average.

Our results correspond to a modest rise in the September retail sales reported by the ONS. UK consumers bought 0.6 per cent more in Q3 2019 compared to Q2 2019 and 3.1 per cent more than a year ago. However people seemed to have bought fewer non-essential items in the past month, with almost all areas of non-food retail reporting falling sales quarter on quarter. With more retailers going into administration and big department store sales slowing, structural challenges around cost and competition continue and there is a clear divergence of performance across retail categories and business models.

Online retailers continue to report strong growth, outperforming the high street. Online spending now accounts for 19.1% of all retail spending. Online sales rose in almost all categories compared to last year, led by non-store retailers including pureplays and household goods stores and followed by grocers, clothing, footwear and textiles stores and other – including key categories such as electrical – retailers. Sales were down year on year at department stores.

Grocery shopping online gains shares

While official share of online grocery runs at six per cent, our data shows 20 per cent of consumers do some of their main grocery shopping online on an average month. As store openings focus on smaller formats, larger stores are losing shares as a channel for main grocery shop to convenience stores and online websites.

Most large ticket items tend to be bought online

In particular, the leisure categories are more likely to be bought online than other categories while clothing, baby and beauty products are more likely to be purchased in a store.

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