Consumer confidence nudges up despite ‘gloomy’ outlook – Retail Gazette

UK consumer confidence edged higher in December, but overall sentiment remains subdued, according to the latest figures from the British Retail Consortium (BRC). The BRC-Opinium survey shows households are slightly less pessimistic about the economy and their personal finances heading into the next quarter, even as caution persists.

Key shifts in sentiment

• Expectations for the UK economy over the next three months improved to -38 in December, up from -44 in November.
• Expectations for personal finances over the same period strengthened to -10, from -16 a month earlier.
• Predicted personal spending specifically on retail eased to +6, down from +8 in November.
• Overall personal spending expectations rose to +17, from +14 previously.
• Plans to save slipped, with expectations for personal saving falling to -9, compared with -5 in November.

What’s driving the uptick?

The modest lift appears to reflect relief that the recent Budget was not as harsh for households as many had feared. However, confidence in the broader economy remains deeply negative, having stayed below -30 for the vast majority of the past year. That backdrop continues to weigh on shoppers’ willingness to spend, particularly in retail categories where discretionary purchases can be delayed.

Spending and saving: a mixed picture

The survey signals a split in consumer behavior. While people expect to spend a little more overall, they are anticipating spending less within retail specifically, suggesting a continued focus on essentials, value, and careful budgeting. At the same time, the dip in saving intentions points to ongoing pressure on household finances—either due to higher living costs or a cautious reallocation of funds toward immediate needs.

Retail outlook and policy considerations

The BRC cautioned that challenges will persist into the year ahead. It urged policymakers to prioritize growth by cutting red tape and reducing bureaucratic burdens so that businesses can invest and create jobs. The trade body has asked that the cumulative effect of new rules—such as those linked to employment rights and regulations around less healthy foods—be carefully considered to ensure they are workable in practice and do not unduly penalize responsible businesses.

Recent trading context

Retail trading conditions in late autumn were already under pressure. Pre-Budget uncertainty weighed on November’s Black Friday period, and earlier reports pointed to rumours of tax increases and poor weather deterring shoppers from heading out. These factors likely contributed to the tempered expectations for retail spending seen in December’s data.

Bottom line

Confidence is no longer sliding as rapidly as earlier in the year, but it is far from robust. With economic sentiment still firmly negative, the retail sector faces a delicate start to the new year. Retailers will be hoping that any easing in cost pressures and clearer policy signals can help unlock more consistent consumer demand, even as households remain vigilant with their budgets.