Consumer confidence continues to fall in the run up to Christmas

Despite consumer confidence building gradually between April and September this year, it has fallen for the second month in a row, according to GfK’s Consumer Confidence Index for October.  

The overall measure of consumer confidence fell one point to –21, an eight-point decline since August, but still stronger than last October’s -30. 

This is bad news for marketers, who are in the crucial golden quarter with Black Friday and Christmas around the corner.

The fall in consumer confidence, both in general economic and personal finance situations, reflects the “despondent mood” consumers are experiencing, according to Neil Bellamy, consumer insights director at GfK. 

Consumer confidence in the general economic situation fell five points to –42, while confidence in personal finance situations over the last 12 months fell one point to –10.  

In August, overall confidence was at its highest level since September 2021 and had been on an upward trajectory since April. However, this is no longer the case despite headline inflation falling in October.  

“Consumer confidence fell one point this month, following September’s sharp seven-point drop, suggesting consumers remain in a despondent mood,” says Bellamy. 

Despite the fall in inflation this month, “wage growth fell faster and prices remain high wiping out any upside for many”.

The barometer’s results offer a “little break in the gloom for marketers”, however, as there’s a two-point lift in the major purchase index, and a one-point increase in expectations for personal finances.

“With less than a week to wait for the Budget statement, marketers will be hoping for positive news for household finances as we enter the run up to Christmas. But with the rise in the energy price cap taking effect, this could be the most challenging festive season for many Brits since the start of the cost of living crisis,” concludes Bellamy.