Covid-19: Consumer confidence increases as retail and hospitality reopens

UK consumer confidence has improved by three points in the past two weeks, from -30 to -27, the latest GfK Consumer Confidence Index report has found. This appears to be linked the easing of Covid-19 lockdown restrictions, which has included non-essential retail stores reopening from 15 June, and pubs and restaurants from tomorrow.

The findings provide hope that businesses in sectors such as retail and hospitality will receive a boost over the coming weeks. The news comes at the end of a week in which mass job losses have been announced across a number of sectors, including retail. This includes 600 jobs lost at menswear retailer TM Lewin, which will become an online only business.

In interviews carried out between 18 and 26 June, four measures grew. These included encouraging increases in the major purchase index and in the general economic situation over the next 12 months. Only one measure fell: the general economic situation over the last 12 months.

However, at -27, consumer confidence unsurprisingly remains very low amid the economic uncertainty caused by the Covid-19 crisis.

Joe Staton, client strategy director at GfK commented: “Despite the backdrop of dire warnings about the state of the economy, large-scale job losses, the end of furlough with the prospect of further unemployment, and a possible second-wave of Covid-19, consumers appear to be slightly more confident as lockdown loosens across parts of the UK.

"After the recent near-historic low of -36 for the Consumer Confidence Barometer last month, we‘re seeing some early signs of improvement across most measures for our fourth Covid-19 flash, even though all our core scores remain negative.

"The seven-point jump in the Major Purchase Index could bode well for ‘reopening day’ this Saturday as more shoppers hit the high streets after a trip to the pub and visit to the hairdresser. However, economic headwinds could easily blow any recovery off-course with confidence remaining fragile and volatile amid few signs of stability.”

The BDO High Street Sales Tracker published today found that online shopping grew by over 100% for the third month running in June, as consumers continue to shift to eCommerce despite the recent reopening of the high street.

Photo credit (iStock): Phynart Studio