Consumer confidence stabilises as Gen Z gears up to spend

Consumer confidence stabilised in March following a record low last month, as Gen Z geared up spend.

Expectations around personal spending on retail over the next three months rose from -5 last month to 0, according to the British Retail Consortium (BRC), while expectations around personal spending overall climbed from +4 in February to +11 in March.

Consumer expectations for the broader economy over the next three months edged up to -35 in March from -37 in February.

The BRC’s CEO Helen Dickinson noted that spending expectations for DIY and home improvements moved into positive territory for the first time.

Additionally, she explained Gen Z was expected to spend more than the previous three months across all categories, while Gen X planned the biggest spending cuts for most items, excluding food.

Food and grocery spending expectations continued to outperform other categories and hit a new high, although Dickinson noted this could be due to the expectation of rising prices.

The trade association’s CEO highlighted that the upcoming Spring statement would be an opportunity for the government to “inject some confidence back into the economy”.

Dickinson said: “In a matter of weeks, retailers grapple with the reality of billions in extra costs from the increases to employer National Insurance and the National Living Wage.

“This £5bn in new costs will give many no option but to push prices up.”

She continued: “Food inflation is likely to hit 5% by the end of the year, and with further costs from the new packaging tax and implementation of the Employment Rights Bill, prices risk being pushed up further.

“Without a much needed confidence boost from government, the scale of new costs will see retail investment fall further, holding back future growth in the economy.”

In February, the GfK reported that consumer confidence had registered a notable increase, sparking optimism for the retail sector as businesses adapted to ongoing economic challenges.

The GfK consumer confidence index showed an improvement of two points from January to mid-February, rising from -22 to -20.

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