Over half of consumers expect price hikes
Verdict Retail’s latest poll of 2,000 UK consumers shows that the future consumer sentiment index has fallen once again, as all three components – views towards the economy, personal finances, and future retail spending – decline. The index plummeted 6.6 points on September, driven by a sharp 10.1 decline on the UK’s economic outlook index. This index is expected to decline further as the uncertainty caused by the US election gave only a short-lived boost to the pound against the dollar and is now weakening once again.
Predicted price rises come to fruition
October’s inflation index that looks at consumer sentiment regarding price rises in sectors such as food, fuel and clothing, declined by 8.7 points on September reaching its lowest level since November 2013. During October, the pre-empted price rises, caused by a rapid depreciation of the pound became reality; supermarket giant Tesco and food and household goods supplier Unilever entered a high-profile dispute over increasing costs. We predict that this index to fall further as import costs increase.
Zoe Mills, Analyst at Verdict Retail, comments:
“Consumer sentiment has taken a significant knock over the last two months and with March 2017 (when the UK government is expected to invoke Article 50) looming ever closer, this index may see little improvement over the coming months. Retailers are likely to have a particularly hard time as almost 50% of consumers plan to spend less, compared to under a third of consumers planning to spend less this time last year.”