UK consumer confidence suffers biggest fall since Covid ahead of Christmas

UK consumer confidence has suffered its biggest fall since the start of the Covid pandemic, just as retailers head into the most important trading period of the year. The GfK Consumer Confidence Barometer dropped 11 points to -24 in October, the sharpest monthly fall since March 2020, with every measure down on September, as Marketing Week reported.

The figures

Expectations for the general economy over the next 12 months fell 14 points to -36, the biggest drop of any measure. The major purchase index, a key guide to spending on big-ticket items, also fell 14 points to -22. The only measure to rise was the savings index, up one point to 28.

GfK linked the fall to relentless cost of living pressure, inflation at 3.5% and unresolved international conflicts. It also said the optimism seen over the summer has faded across all groups of shoppers, ahead of the Budget on 28 October.

What it means for marketers

Neil Bellamy, consumer insights director at GfK, said brands need to address trust and durability, and show that a product meets a real need. Shoppers, he said, are asking whether they will still feel a purchase was worth it in six months’ time.

Why it matters

Christmas budgets are largely committed, so the question for brands is less how much to spend than what to say. With the major purchase index falling so sharply, expect more value messaging, more price promotion and more pressure on campaigns built purely on emotion, even though the evidence on price promotions suggests brands should be careful how far they lean in.

The data also sits awkwardly next to the more positive mood among marketers in the latest IPA Bellwether. If shoppers keep their hands in their pockets through November, the first casualties are likely to be fourth-quarter targets rather than ad budgets already booked.