A Consumer Spending Revival on the Horizon for the Second Half of 2024
Favourable economic indicators, combined with the highest consumer sentiment in three years, could lead to a more positive finish to the year for some retailers. While there is an intention for increased spending, the majority of consumers are still planning cutbacks. So where will consumers prioritise their spending? And how can retail and leisure operators prepare for the Golden Quarter?
Signs of a Spending Revival: Uptick in Consumer Sentiment and Household Finances
The pinch felt by consumers appears to be easing. Economic indicators – falling inflation, anticipated interest rate cuts later this year, and rises in wages, benefits, and pensions – all point more favourably for consumers. Many are now starting to feel the impact of these macroeconomic changes, and our latest survey shows household finances are now at their strongest for two years.
Bira CEO, Andrew Goodacre comments on the survey "Everyone in independent retail knows how difficult trade has been in the first 6 months of this year. There are many reasons, from political and economic uncertainty to the all-important weather.
Whatever the reasons, consumer confidence has been very low, and if consumers lack confidence, they are less likely to spend money. This report from PWC seems to offer some optimism looking ahead, with consumer confidence and sentiment being more positive.
A change of government may have helped. The weather has been better and hopefully this increased level of consumer confidence will run into the second half of the year. But it will still be difficult for trading, with consumers still looking for value, and we still face the prospect of energy costs rising in the autumn."
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