Alert for Black Friday as confidence of £35K-£50K UK earners drops
Alert for Black Friday as confidence of £35K-£50K income households in the UK drops
September has seen a sudden, worrying drop in the confidence levels of those earning in the £35,000 to £49,999 bracket, driven by increased concern for the UK’s economic position in the coming 12 months.
This group is particularly important to retailers, as ordinarily they have some disposable income left over once the day-to-day bills have been paid. Confidence within this group has been steadily improving since March this year, with no real wobble seen until July. However, the 11-point drop from August to September is the largest of any income group, and a clear sign that these households are picturing the likelihood of a looming downturn.
The main factors behind the lost confidence for these above-average income earners are partly their perception of their own finances over the next 12 months (down 11 points in September from the month before), but even more so their increasing concern about the UK’s financial future. That measure dropped 15 points in September, compared to August.
Red alert heading into Black Friday and the Golden Quarter?
Adding to the alert for retailers is the significant drop also seen this income group’s perception of ‘is now the right time to buy?’. This is especially concerning for both physical and virtual retailers in the run-up to Black Friday and the Golden Quarter.
Joe Staton, Client Strategy Director GfK, comments, “This is normally a time to splash the cash, to treat yourself or your family to a new piece of tech, or the latest consumer electronic gadget. For the £35-50K earners, at least, there may be less inclination to spend this coming quarter, driven by their perception that money might be getting tighter over the months ahead."
How can manufacturers and retailers respond to this?
Staton’s advice is this, “Despite the downturn in financial confidence, canny consumers can still be persuaded to loosen their purse-strings. Retailers who are looking to avoid deep discounting and slashed pricing should instead focus on offers that reinforce the overall perceived value of the purchase. Quality, longevity, convenience, service and eco-creds are all part of the consideration set for consumers, and increasingly important in deciding whether to choose your brand over that of your competition.”
Keep pace with consumer confidence
GfK’s Consumer Confidence Barometer (CCB) has provided essential context for businesses and organisations during times of crisis. It has offered insight into the UK’s thinking through boom and bust, the Brexit vote, and most recently, the coronavirus pandemic.