Consumer confidence fell by one percentage point in the third quarter of 2021, new data shows.
The latest Deloitte Consumer Tracker reveals that overall confidence was dented by reduced optimism around personal finances, specifically in the level of debt and household disposable income.
Confidence in job security, job opportunities, and career progression were also up on the previous quarter – by one and three percentage points, respectively – as job vacancies reached a 20-year high.
Respondents also indicated that they expect to reduce their spending over the next three months, including over the festive period. However, this represents a ‘normalisation’ of spending patterns going into the retail sector’s ‘golden quarter’, coming down from second and third-quarter highs.
Ben Perkins, head of consumer research at Deloitte, said: “Following the cancellation of many Christmas plans last year due to the pandemic, consumers demand remains very strong and many will be looking to make up for missed celebrations. However, consumer behaviours are already reflecting concerns on the availability of some goods, with early birds already making a start on their Christmas shopping to avoid possible disappointment.
“For retailers, an extended Christmas shopping period is in many ways beneficial, spreading demand over a longer period, smoothing peaks and potentially reducing the need for price discounting. In anticipation of ongoing supply chain disruption, some retailers have brought Christmas merchandise to shop floors earlier to ensure consumers can find what they need for the festive period.”
Ian Stewart, chief economist at Deloitte, added: “The dislocation of the last 18 months has created a huge supply-demand mismatch. A year ago the central economic problem was excess capacity and too few jobs; now it is insufficient capacity and too many jobs. With inflation well above its 2.0% target, and likely to rise further, the stage looks set for the Bank of England to raise interest rates by the end of this year.”
The Deloitte Consumer Tracker is based on responses from 3,185 UK consumers between 17 and 20 September 2021.