UK consumers entered 2016 on a high
26 January 2016
- Deloitte Consumer Tracker shows rising confidence in Q4 2015
- Consumer confidence about household disposable income climbs to highest level since the Tracker began
- Consumers shed recession-era defensiveness; cautionary spending behaviour at its lowest level since Q3 2011
UK consumers entered 2016 in a buoyant mood, according to the latest Consumer Tracker from Deloitte, the business advisory firm. The quarterly survey of 3,000 UK consumers reveals that consumer confidence rose by one percentage point year-on-year in Q4 2015, the highest fourth-quarter reading in more than four years.
The biggest improvement in confidence has been in relation to household disposable income, which is now at its highest level since the Tracker began. Consumers are also more optimistic about their job security, job opportunities and career progression than they were a year ago.
Despite a year-on-year improvement, the overall confidence index fell by two percentage points, from -5 per cent to -7 per cent, between the third and fourth quarters of 2015. This dip is typical of a seasonal effect with sentiment on health and welfare nudging lower in the post-Christmas period.
Ian Stewart, chief economist at Deloitte, said: “UK consumers navigated their way through the multiple uncertainties of 2015, including a General Election, with consumer spending rising at the fastest pace in 10 years.
“The recovery in confidence over income suggests that 2016 will be another good year for consumer activity in the UK.
“Low inflation, low interest rates, rising wages and falling unemployment are all supporting consumer spending power. Despite global economic worries and financial market volatility, UK consumer spending looks set for further growth in 2016.
“Nonetheless, hurdles lie ahead for consumers and retailers. The possibility of a referendum on EU membership taking place as early as June this year is a new source of uncertainty.”
The Consumer Tracker showed spending rising in several key categories in the fourth quarter of 2015, including furniture and homewares, going out, electricals and clothing and footwear. In the latter, sales volume was driven by unprecedented levels of discounting in the lead up to the Christmas period. Retailers with a strong online presence and good delivery propositions performed particularly well during the period, as shoppers chose to stay at home and buy online instead of hitting the high street.
Ben Perkins, head of consumer business research, added: “Shoppers were slow to get going in the run up to what was a rain-soaked Christmas period. However, spending gathered momentum as the year drew to a close and consumers took advantage of some great bargains. The leisure sector performed particularly well in Q4; consumers wanting to eat out were not put off by the wet weather in November and December.
“Significantly, our research shows that consumers are becoming less cautious in their spending behaviours. Our index of cost-conscious, defensive spending behaviour has fallen to the lowest level since the Tracker began.”
Note to editors
About the research
The Deloitte Consumer Tracker is based on a consumer survey carried out by independent market research agency, YouGov, on our behalf. This survey was conducted online with a nationally representative sample of over 3,000 UK adults aged 18+ between 4 and 6 January 2016.
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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