BRC says UK consumers do not share growing international optimism
Latest figures from the British Retail Consortium (BRC) and the Nielsen Company have shown that consumer confidence levels in the UK were down nine points lower in the first quarter of 2011 than at the end of 2010.
The GB Consumer Confidence index, part of the Nielsen Global Consumer Confidence Survey, fell sharply against a global backdrop of growing optimism with 18 out of 51 countries covered by the survey seeing confidence rise over the period.
BRC said that fears about job prospects drove down confidence levels in the UK with 77% of respondents saying that job prospects were not so good or bad, compared to a global average of 49%.
According to the survey, Britain is becoming a nation of savers with 34% of respondents putting their spare cash into savings. However, 30% of UK respondents said that they had no spare cash at all, the highest percentage the survey has ever recorded.
Nearly one third of those surveyed felt the economy was a major concern (18% said this was their number 1 concern with a further 12% citing it as their second concern) and fuel prices were also a worry with 21% of UK respondents saying it was either their first or second concern. Globally, respondents were most concerned about rising food prices. In the UK 85% of those polled believe the UK was still in recession (up from 82% in the previous quarter).
Chris Morley, group managing director of Nielsen UK & Ireland commented: "The long hard winter and continuous media coverage of UK debt levels and cuts in the public sector are all taking their toll on consumer confidence in the UK. I would envisage a continuation of lower confidence as consumers are still being very cautious in their spending intentions."
Seven out of the top ten most optimistic countries hailed from Asia Pacific, while European markets dominated nine out of the top ten most pessimistic nations. India remained the most optimistic country in the first quarter with a Consumer Confidence Index (CCI) of 131 followed by Saudi Arabia and Indonesia."
BRC Director General Stephen Robertson said: "Nearly a third of people now say they have no spare money because households are suffering a squeeze between high inflation and low wage growth. In real terms, disposable incomes have fallen for the first time in 30 years.
"With inflation expected to rise further and average earnings showing only minimal growth, disposable incomes will be under continuing pressure for the rest of the year and beyond.
"The prospect of interest rates beginning to rise as the housing market weakens can only dent consumer confidence further over the coming months."
The Nielsen Global Online Survey was conducted between March 23 and April 12, 2011 and polled more than 28,000 consumers in 51 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America.
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