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Are Consumers Confident of An Economic Recovery?

Are Consumers Confident of An Economic Recovery?

As the UK looks to recover from the economic setbacks the health pandemic has caused, the government has introduced various schemes to benefit the public and get the economy moving in the right direction again. 

Despite the easing of lockdown in most parts of England and the reopening of restaurants, casinos, beauty salons and cinemas, consumers aren’t so optimistic and confident about the chances of a quick economic turnaround. 

GFK (Growth From Knowledge) index remained at -27 in August. The general economic situation over the next 12 months, in score, decreased by one point to -62; this is 28 points lower than in August 2019. The biggest incentive the government has been offering the general public is their ‘Eat out To Help Out’ initiative, providing major discounts among the nations favourite restaurants. This incentive has been available to those who dine out from Monday to Wednesday, with 50% off their meals. 

However, despite these efforts, the expectation of the economic situation for the next 12 months remains the same, down by one point at -42 points and four points lower than August 2019, with Christmas still to come. 

GfK’s client strategy director, Joe Staton, said: “Consumer confidence is clearly not improving as we’d all hoped it would. Daily announcements of job cuts being made by household names – the latest of them high street favourites John Lewis, Marks & Spencer and Pizza Express – are reminding people that there are no certainties in this new world.
“The UK recently went into recession for the first time in 11 years and the threat to jobs across a whole swathe of industries suggests consumers will feel worried for some time.”
The pandemic has caused major disruption to businesses and as a result, employees have faced redundancy. People’s feelings about their personal financial situation over the last 12 months is down one point to -5; this is four points lower than August 2019. Despite this decrease, the forecast for personal finances over the next 12 months is up one point to +1 this month – although still one point lower than last year. 

Stanton finished by saying: “ The picture for personal finances for the coming year has improved slightly and crept into positive territory. The major purchase index is also up a point, but this offers little solace to marketers as the measure is still sharply negative at -25.

“It looks like a long hard slog to the end of the year and probably beyond, so marketers will need to find reasons for consumers to be cheerful.”

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