Consumer confidence amongst those aged 25-34 has seen a marked improvement, according to research from PwC UK, which comes ahead of government guidelines published this week paving the way to the reopening of non-essential retailers.
The figures show that consumer sentiment went up from -7 to +16 for consumers in this age group based on a survey tracking people’s expectations of their future disposable income and shopping behaviour.
Those in the 25-34 year old age group have also for the first time overtaken 18-24 year olds as the most financially optimistic age bracket, with both age groups recording net positive sentiment (i.e. more people expecting to be better off than worse off in the next 12 months). Conversely, consumers approaching retirement age (55-64 year olds) are the most worried about their financial prospects, with a net sentiment of -31.
The data showed that overall sentiment at -12 is a slight improvement on last month, as well as on the March survey, undertaken directly after English school closures, when sentiment was -26. While sentiment remains at its lowest since 2014, British consumers are still more optimistic than they were during the global financial crisis of 2008/9, and the post recovery period of 2011-13.
The relative optimism of the population can partly be attributed to the financial impact of the lockdown on UK households. Only 19% of adults said that they had lost some or all of their income through job loss or furlough, ranging from 29% of under 25s to 5% of over 65s. By contrast, 39% of adults said that their financial situation had not been adversely affected since March, and a further 19% said that they had actually saved more money.
Lisa Hooker, Consumer Markets Leader, at PwC UK, said “Despite the obvious economic impact Covid-19 is having,, it seems that sentiment remains resilient for many consumers, and especially those in the 25-34 age bracket, who may have benefited from being more established in their jobs and saving money on going out and holidays.”
“The results show that some consumers do expect to have more disposable income, and are willing to spend it. So, with the planned loosening of restrictions on non-essential retail in June coupled with policies to achieve social distancing , the high street has the potential to benefit from some bounce back and quickly.”
The poll also found a significant uptick in local and ethical shopping behaviours with 24% of consumers buying more from small shops or independent retailers instead of big chains and 18% buying more from their local high streets.
While small shops and local high streets were equally popular across all age groups, there were regional variations. For example, consumers in Northern Ireland, Wales and Scotland were more likely to buy from independent shops (Northern Ireland 46%, 29% Wales, 27% Scotland), while consumers in London were more likely to have rediscovered their local high streets (28%).
Hooker continued “Our results show that many consumers have avoided non-essential travel and rediscovered many retailers that are conveniently local. This is particularly good news for those smaller businesses that have been hit so hard by the seismic changes that the entire sector has had to grapple with.”
“What is heartening for small businesses and local high streets is that even more consumers say they will continue to shop locally after the lockdown is lifted, with almost a third of adults saying that they will spend more in small or independent shops and a quarter saying that they will spend more on local high streets.”
“Moreover, with a third of consumers saying they would spend more with retailers and brands that are looking after their staff over this period, and a third with businesses that have supported the vulnerable or the NHS, it has become apparent that consumers will increasingly be making brand choices based on what operators are doing now, even while many are closed.”