24 November 2023
RSM UK’s Senior Analyst for Consumer Markets, Robyn Duffy said: ‘With inflation and energy bills coming down, and the latest cost of living payments landing, consumer confidence saw a 6-point uplift to -24. However, October’s sharp drop to -30 illustrates how fragile confidence is, with this vulnerability likely to shape the final quarter of the year and beyond.
‘In what is supposed to be the ‘most wonderful time of year’, tighter monetary policy is taking its toll. The cumulative effect of inflation, higher interest rates and a cooling labour market are dragging on sentiment and impacting consumer’s willingness to spend. This is demonstrated by two consecutive months of weak retail sales and slowing hospitality sales*, which doesn’t bode well for the all-important final quarter of the year.
‘The Golden Quarter is the time when retailers make the majority of profits, and the hospitality sector feels a boost from higher footfall in towns and cities. November’s confidence levels - though an increase – still leaves us in negative realms and indicate muted consumer spending will continue. Even Black Friday and Cyber Monday sales will likely slump this year as lower confidence sees consumers focus on essential spending rather than stocking fillers’.
*See the latest results for the CGA RSM Hospitality Sales Tracker