Travel spending ‘vulnerable’ as consumer confidence plummets
Consumer confidence has experienced the sharpest drop since December 1994 and travel spending is ‘particularly vulnerable’.
A one-off poll by research group GfK, following Britain’s vote to leave the European Union, found the index has fallen 8 points to minus 9.
"All of the key measures used to calculate the Index have fallen," said GfK.
"This long-running survey dates back to 1974, and there has not been a sharper drop than this for 21 years."
The result was split according to how people voted and showed that ‘Remainers’ were at minus 13 while ‘Leavers’ were more optimistic at minus 5.
"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," said Joe Staton, head of market dynamics at GfK.
"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 survey was run from June 30 to July 5 to capture the mood of consumers after the Brexit decision on June 24.
"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," added Staton.
The poll also found that 60% of people 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%.
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 drop of 2 points.
Amongst the young (16-29 year olds) confidence has dropped 13 points, but this group remains the most optimistic of all age groups.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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