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Consumer confidence still higher than 2008/9 financial crisis lows despite sharp drop as global impact of COVID-19 continues


Consumer sentiment has fallen sharply as COVID-19 continues to impact the global economy, according to fresh data from PwC UK. Despite this, figures have yet to fall to the levels seen during the financial crisis of 2008-9 or even the post recession period (2011-12) indicating that protective measures announced by the Government have cushioned the blow for some consumers.

The poll was conducted last weekend (20-22 March) following the government’s request for people to work from home and socially distance, but before the Prime Minister’s statement to the country announcing more stringent controls on movement.

The UK-wide consumer sentiment survey, which charts the opinions of over 2,000 adults, shows that consumer sentiment fell by 29 points to -26 between December 2019 and March 2020, the sharpest quarterly fall in over 10 years. In contrast net sentiment improved from -7 to +3 in the last quarter of 2019, reflecting the impact of high employment, real wage growth and political stability on the wallets of UK shoppers.  

While sentiment has declined across all age groups, it is steepest amongst under 28 year olds, with a 58 point decline, compared to an 11 point decline for those aged over 65, reflecting their exposure to industries hardest hit by job and wage insecurities.

Despite the fall in confidence, a net sentiment of -26 is higher than during the global financial crisis when it fell to -51 directly after the collapse of Lehman Brothers in October 2008. Confidence  also remains higher than during the post-recession period when it fell to -42 at the height of austerity in early 2012.

Lisa Hooker, Consumer Markets leader at PwC, said:   

“It is no surprise that the impact of COVID-19 has prompted such a significant decline in consumer sentiment. Following a period of high employment and rising real wages, many households are facing the prospect of job and wage insecurity at a scale which they may never before have experienced in their lifetimes.

“Despite the magnitude of the challenges facing the country, government intervention in the past week does seem to have cushioned the blow for many families, for example, through wage guarantees for furloughed employees. The question is whether this will be enough to hold up consumer sentiment should the current lockdown measures last longer than expected.

“But these results do give confidence that consumer sentiment, and therefore spending intentions, have the potential to bounce back quickly once the crisis abates. Which retailers and brands consumers choose to return to will depend on how they communicate with and treat their customers and staff today, and it's crucial that the industry remains mindful of how to approach the recovery period, when it eventually comes."



About the survey findings

  1. PwC asked the question “Thinking about your disposable income (money remaining after household bills, credit cards, etc.), in the next 12 months do you expect that your household will be better off or worse off?” PwC then calculated the “consumer sentiment index” by subtracting the percentage of people who thought they would be worse off from those who thought they would be better off.

  2. PwC has asked the same question every few months since April 2008. In the latest survey, PwC spoke to a nationally representative sample of 2110 adults between 5pm 20 March and 5pm 22 March.

  3. PwC also asked whether respondents thought they would spend more or less on different product and service categories in the 12 months, with the net spending intention calculated by subtracting the percentage of people who thought they would spend less from those who thought they would spend more

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Diana Yeboah

Manager, media relations, PwC United Kingdom

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