Deloitte Consumer Tracker: Consumer confidence suffers a setback, but pressure on leisure spend continues to ease has been saved
Deloitte Consumer Tracker: Consumer confidence suffers a setback, but pressure on leisure spend continues to ease
31 January 2014
- Consumer confidence dips in Q4 2013 (-11% vs. -8% in Q3 2013);
- However, net spending on holidays stabilised, improving by a point year-on-year (-9% in Q4 2012 to -8% in Q4 2013);
- Net spending on short breaks and eating out also rose from -11% to -9% (Q4 2012 to Q4 2013);
- Fall in confidence is likely to be a temporary set-back as an improving economy should help lift real incomes in 2014.
Consumer confidence suffered a dip last quarter (Q4 2013), for the first time in 12 months, according to the latest Deloitte Consumer Tracker. The net balance of sentiment fell slightly deeper into negative territory to -11% (vs. -8% in Q3 2013), highlighting the uneven nature of the recovery.
However, falling inflation has helped reduce downward pressure on discretionary spending despite no real income increase. As a result, net spending on holidays year-on-year has stabilised at -8%, improving from -9% in Q4 2012. Similarly, net spending on short breaks and eating out rose two points from -11% (Q4 2012) to -9% (Q4 2013).
Looking forward, consumer confidence is expected to resume its climb in 2014 as lower inflation and an improving labour market combine to help lift real incomes and provide the conditions for sustained growth in the consumer market. During the first quarter of 2014, consumers plan to spend more on holidays with the net spending expected to rise to -4% (from -8% in Q1 2013). Similarly, consumers anticipate their net spending on short breaks and eating out to rise from -22% from -19%.
Graham Pickett, head of travel, hospitality and leisure at Deloitte, said: “We think the dip in consumer confidence is a setback rather than a longer-term, underlying decline. Consumer sentiment is higher than it was a year ago and an accelerating economy and lower inflation should bolster consumer incomes in 2014.
“Consumers are being selective, trading down in some categories, in order to be able to trade up in others, such as their holidays and eating out. Despite the emergence of signs of a recovery in the consumer economy, the job of selling to them will continue to be challenging as the ‘considered’ buying behaviours developed during the recession are here to stay.”
Notes to editors
About The Deloitte Consumer Tracker
The Deloitte Consumer Tracker is an economic update focussed on consumer spending attitudes and behaviours. Through a quarterly survey of 3,000 adult UK consumers it monitors the patterns of consumer expenditure on a category-by-category basis and the underlying drivers of spending behaviour, notably household disposable income and consumer confidence. It also considers consumers’ spending outlook for the next quarter.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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“We think the dip in consumer confidence is a setback rather than a longer-term, underlying decline. Consumer sentiment is higher than it was a year ago and an accelerating economy and lower inflation should bolster consumer incomes in 2014"-Graham Pickett, head of travel, hospitality and leisure at Deloitte