People planning to spend less nationwide as Brexit approaches

A new study reveals low consumer confidence across the UK with people preparing to spend less in the coming months. The new Consumer Compass research by Savanta, the global intelligence business, draws on data from 2,000 consumers across the nation and shows that women and people aged 18 – 34 years old are feeling the pinch the most.

Savanta has been running the research since 2010, three times a year. The study shows that 34% of consumers have less disposable income in Q3 2019 – a 3 point increase from the 30% who were watching their pockets in Q1.

The picture now, pre-Brexit, is more positive than post-financial crisis a decade ago, with 32% of people feeling more confident about their financial situation, up from 25% in 2010.

However, when broken down by group, adults with children are as badly off economically as they were post-crash, with 1 in 10 families suffering in both 2010 and now; and the same is true to for Gen Z and Millennials. The fashion and personal grooming sectors have felt the force of this with 41% and 33% of the public saying they are spending less in those categories, up 5 points on Q1 2019.

Other key takeaways from the research:

  • ABC1 consumers; confidence in the economy is lower than it was in the post-credit crunch world of 2010 (9% drop in confidence since 2010)
  • C2DEs have an improved outlook for the economy (32% feel more confident about the economy, up 7%), but confidence in their own personal finances is static over the decade with only 1 in 5 feeling confident
  • Men, ABC1s and consumers without kids or dependents have the highest levels of insulation from the economy in Q3 2019 (33%, 27% and 30% saying they are unaffected by the economic situation, respectively)
  • There is a general improvement in personal finances since 2010 with the amount of consumers with more disposable income compared to the previous year increased by 13%
  • However, this has not converted unanimously to increased spending: only those groups that were the most confident in 2010 (men and people without dependents) have seen the level of insulation from the economy significantly increase over the decade (men: 33%, up 9 points, people without dependents: 30%, up 8 points)
  • Millennials seem to be valuing experiences more than ‘things’ with increased spending on holidays and exercise: 15% of 25-34 year olds are spending more on holidays, up 2 points on Q1, and 9% spending more on gym, up 4 points
  • Whereas middle aged people are spending more on staying in rather than eating and drinking out of the house (spend for eating / drinking in has increased 3% since February, and has decreased by 8% for eating out)

Oliver Fenton, senior consultant at Savanta, commented:

“Both consumers and business are displaying similar traits ahead of Brexit – some are better prepared for an economic downturn than others.

“While personal finances have, for the most part, improved since the financial crash, this has not converted unanimously to increased spending. Businesses who have identified the groups most likely to withdraw from spending in the face of heightened uncertainty, and how large these groups in their customer base are, will be best equipped for any Brexit outcome.”

Savanta is part of the Next15 Group.