In a one-off special GfK Consumer Confidence Barometer (CCB) to measure post-referendum sentiment, the core Index has fallen 8 points to -9. All of the key measures used to calculate the Index have fallen. This long-running survey dates back to 1974, and there has not been a sharper drop than this for 21 years (since December 1994).
Splitting the Core Index result by how people said they voted in the referendum, Remainers were at -13, versus Leavers who were more optimistic at -5. The survey was run from 30th June to 5th July to capture the mood of consumers immediately after the Brexit decision on 24th June.
Joe Staton, head of market dynamics at GfK, says: “In these extraordinary times this one-off CCB Brexit Special gauges the temperature of consumer confidence right now. During this period of uncertainty, we’ve seen a very significant drop in confidence, as is clear from the fact that every one of our key measures has fallen, with the biggest decrease occurring in the outlook for the general economic situation in the next 12 months.”
The results reveal consumer concerns about the economic outlook. Six in 10 (60%) expect the general economic situation to worsen in the next 12 months, up from 46% in June. Only 20% of consumers expect it to improve, down from 27% in June. The proportion of people who believe prices will increase rapidly in the next 12 months has jumped 20 percentage points from 13% to 33%.
There are distinct differences in how confidence has changed regionally. In the north of England, confidence has dropped 19 points and in Scotland it has fallen 11 points. In the south (including London), there has been a 2-point drop.
Amongst the young (16-29 year olds) confidence has dropped 13 points, but this group remains the most optimistic of all age groups.
The biggest drop in confidence, from an income perspective, is a fall of 16 points among households with income levels of £25,000-£49,999.
“Our analysis suggests that in the immediate aftermath of the referendum, sectors like travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending," says Joe. "As we’ve learnt from previous periods of uncertainty, consumers turn to well-known brands they love and trust as a guarantee of quality and value for money. Now is the time for companies to understand and respond to consumer concerns by anticipating and meeting their needs.”