Market researcher GfK says that consumer confidence has hit a five-year low in the UK following the result of the EU referendum.
According to GfK, consumer confidence is currently graded -9, down from -1 in the previous month. The company said that this was the steepest decline it has seen since January 2011, with a similar decline not seen since 1994.
Joe Staton, Head of Market Dynamics at GfK, said: “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. 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.”
The researcher also said that 60% of those surveyed were expecting the general economic situation to worsen in the next year. Just 20% of consumers expected it to improve.
UK retailer John Lewis has also warned consumers of looming price increases as the weakened value of the pound takes its toll on the business. Andy Street, Managing Director at the retailer, said that it was still too early to tell if consumer confidence had been affected. However, he did admit that sales had decreased in the seven days following the Brexit result.
