Latest news with #consumerconfidence
Daily Mail
5 hours ago
- Business
- Daily Mail
Retail sales slumped in May after April spending spree - but consumers are feeling more confident
Retail sales slumped last month as shoppers held back after an unexpected April binge, and higher inflation weighed on spending. Retail sales volumes fell 2.7 per cent in May, far exceeding expectations of a 0.5 per cent fall and dragged lower by a 5 per cent slump in food sales, according to fresh data from the Office for National Statistics. All sales categories suffered decline for the month and volumes are now 1.3 per cent lower than this time last year, the biggest drop since April 2024 and well below economists' forecasts for 1.7 per cent growth. It follows the sunniest April on record, which prompted Britons to splurge on new clothes, food for Easter gatherings and DIY essentials, and drove retail sales 7 per cent higher for the month. Sagar Shah, associate partner at McKinsey & Company, said retailers' reversal of fortunes could be linked to food inflation hitting its highest level since February 2024 at 4.4 per cent, while 'other fiscal pressures' faced by retailers, such as higher labour costs, 'could potentially be impacting promotions'. But separate data on Friday showed British consumer confidence rose is now at its strongest level this year, with Britons feeling more slightly more positive on the economic outlook. Shah added: 'What's becoming increasingly clear is that consumer sentiment and spending patterns are no longer neatly aligned.' GfK's closely watched consumer confidence index rose to -18 in June from -20 in May, beating forecasts of an unchanged reading. Consumers' assessment of their personal financial situation over the next 12 months remained unchanged at 2 for the month, just barely in positive territory, while their assessment of the UK's economic outlook over the same period improved from -33 to -28. Neil Bellamy, consumer insights director at GfK, cautioned that sentiment could easily deteriorate from here. He said: 'With petrol prices set to rise in the coming weeks following the escalation of the conflict in the Middle East, and with ongoing uncertainty as to the full impact of tariffs, there is still much that could negatively impact consumers.' Thomas Pugh, chief economist at RSM UK, warned tax rises, higher utility bills and more expensive petrol 'will eat into consumers' disposable income', while a cooling labour market will weigh on wage growth and employment throughout the rest of this year. He added: 'However, the outlook is far from dismal. Despite rising inflation and slower wage growth, real incomes will still rise at a reasonable pace this year. 'Household balance sheets are considerably stronger than they have been previously, and lower interest rates will continue to help. What's more, there are good signs that the worst of the labour market pain and tariff uncertainty is already behind us. 'The determinant of spending growth in the second half of the year is likely to be whether consumer confidence continues to rebound and households ease back on their extraordinarily high saving rates.
CNA
11 hours ago
- Business
- CNA
Tariff threats, wars will slow but not collapse global luxury sales in 2025, new study shows
Global sales of personal luxury goods are "slowing down but not collapsing", according to a Bain & Co consultancy study released Thursday (Jun 19). Personal luxury goods sales that eroded to €364 billion (US$419 billion; S$539 billion) in 2024 are projected to slide by another 2 per cent to 5 per cent this year, the study said, citing threats of US tariffs and geopolitical tensions triggering economic slowdowns. 'Still, to be positive in a difficult moment – with three wars, economies slowing down, inequality at a maximum ever – it's not a market in collapse,'' said Bain partner and co-author of the study Claudia D'Arpizio. 'It is slowing down but not collapsing.' Alongside external headwinds, luxury brands have alienated consumers with an ongoing creativity crisis and sharp price increases, Bain said. Buyers have also been turned off by recent investigations in Italy that revealed that sweatshop conditions in subcontractors making luxury handbags. Sales are slipping sharply in powerhouse markets the US and China, the study showed. In the US, market volatility due to tariffs has discouraged consumer confidence. China has recorded six quarters of contraction on low consumer confidence. The Middle East, Latin America and Southeast Asia are recording growth. Europe is mostly flat, the study showed. This has created a sharp divergence between brands that continue with strong creative and earnings growth, such as the Prada Group, which posted a 13 per cent first-quarter jump in revenue to €1.34 billion, and brands like Gucci, where revenue was down 24 per cent to €1.6 billion in the same period. Gucci owner Kering last week hired Italian automotive executive Luca De Meo, the former CEO of Renault, to mount a turnaround. The decision comes as three of its brands – Gucci, Balenciaga and Bottega Veneta – are launching new creative directors. Kering's stock surged 12 per cent on news of the appointment. D'Arpizio underlined his track record, returning French carmaker Renault to profitability and previous roles as marketing director at Volkswagen and Fiat. 'All of these factors resonate well together in a market like luxury when you are in a phase where growth is still the name of the game, but you also need to make the company more nimble in terms of costs, and turn around some of the brands,'' she said. Brands are also making changes to minimise the impact of possible US tariffs. These include shipping directly from production sites and not warehouses and reducing stock in stores. With aesthetic changes afoot 'stuffing the channels doesn't make a lot of sense,'' D'Arpizio said. Still, many of the headwinds buffering the sector are out of companies' control. 'Many of these (negative) aspects are not going to change soon. What can change is more clarity on the tariffs, but I don't think we will stop the wars or the political instability in a few months,'' she said, adding that luxury consumer confidence is tied more closely to stock market trends than geopolitics. President of Italian luxury brand association Altagamma Matteo Lunelli underlined that the sector recorded overall growth of 28 per cent from 2019-2024, 'placing us well above pre-pandemic levels.' While luxury spending is sensitive to global turmoil, it is historically quick to rebound, powered by new markets and pent-up demand. The 2008-2009 financial crisis plummeted sales of luxury apparel, handbags and footwear from €161 billion to €147 billion over two years. The market more than recovered the losses in 2010 as it rebounded by 14 per cent, with an acceleration in the Chinese market. Similarly, after sales plunged by 21 per cent during the pandemic, pent-up spending powered sales to new records.
Times
14 hours ago
- Business
- Times
Consumer confidence edges up despite ‘dark shadow' of inflation
Confidence among British consumers grew a little this month, but a combination of tensions in the Middle East, inflationary pressures and tariff uncertainties has the potential to sour sentiment, a closely watched survey found. GfK's long-running consumer confidence index has edged up by two points in June, despite recent data showing the UK economy contracted by an unexpected 0.3 per cent in April. Still, the index remains firmly in negative territory at minus 18, and four points lower than this time last year. Sentiment about the performance of the UK economy over the past year and its potential to gather momentum in the coming year improved, while the forecast for personal finances over the next year remained unchanged at 2, two points down on this time last year. The major purchase index, an indicator of confidence in buying big ticket items, also remained the same, at minus 16, which was seven points better than last June. However, the survey was carried out before the release of Office for National Statistics figures that showed that the rate of growth in UK inflation dipped to 3.4 per cent in May, down from 3.5 per cent in April but well above the Bank of England's 2 per cent target. Although the GfK index, which started in the 1970s, has gradually improved in recent months and is above the record lows registered at the height of the cost of living crisis in late 2022, it remained below the long-run run average of minus 10. The survey included 2,001 responses and was carried out between May 30 and June 13. Neil Bellamy, consumer insights director at NIQ GfK, said that the rise in confidence tracked the improvements in how consumers see the general economy. However, he flagged that confidence remains fragile due to 'the dark shadow of inflation' being a 'day-to-day challenge for so many of us'. 'With petrol prices set to rise in the coming weeks following the escalation of the conflict in the Middle East, and with ongoing uncertainty as to the full impact of tariffs, there is still much that could negatively impact consumers,' he added. 'With so much volatility, now is certainly not the time to hope for the proverbial 'light at the end of the tunnel'.' This week the CBI downgraded its forecast for annual growth this year from 1.6 per cent to 1.2 per cent, as businesses face higher employment costs, rising inflation and headwinds from the global trading environment. Surveys from the business lobby group have suggested that companies will cut back on investment over the next 12 months at the fastest pace in five years.
Bloomberg
14 hours ago
- Business
- Bloomberg
UK Consumer Confidence Rises, Extending a ‘Fragile' Rebound
The confidence of UK consumers improved for a second straight month, a survey found, extending a rebound that's at risk of being derailed as war in the Middle East and higher oil prices cloud the economic outlook. GfK's gauge of sentiment rose by two points to -18 in June, a release published Friday showed. It's the most positive reading since December and was slightly better than had been expected by economists, with the median forecast predicting it would be unchanged.
Yahoo
14 hours ago
- Business
- Yahoo
UK consumer morale ticks up but Middle East conflict clouds outlook
LONDON (Reuters) -British consumer confidence rose this month to its highest level of 2025 as sentiment about the economy improved, but the threat of rising energy bills stemming from war in the Middle East is hanging over the outlook, a survey showed on Friday. The consumer confidence index from market research firm GfK rose to -18 in June from -20 in May, the highest reading since December. A Reuters poll of economists had pointed to an unchanged reading. Nonetheless, the index remains below its long-run average of -11, and is lower than a year ago. Brent crude oil futures have increased by around 20% since the end of May - potentially a bigger problem for Britain which already has some of the most expensive energy prices in Europe and the highest rate of headline inflation in the region. The Bank of England said on Thursday it would remain vigilant about the risks to inflation from the conflict between Israel and Iran. "With petrol prices set to rise in the coming weeks following the escalation of the conflict in the Middle East, and with ongoing uncertainty as to the full impact of tariffs, there is still much that could negatively impact consumers," said Neil Bellamy, consumer insights director at GfK. The survey's gauges of past and future economic ticked higher in June, although the indexes that measure personal financial confidence - a better guide to consumer spending - were flat. Official retail sales data for May, due at 0600 GMT, are expected to show a fall in sales volumes following a surprise surge in April that statisticians linked to good weather. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
