UK consumer confidence remained virtually unchanged in the final quarter of 2024, with a marginal -0.2 percentage point drop, according to the latest Deloitte Consumer Tracker. And that’s not a positive sign, given it’s the first time confidence has stalled since 2022, it noted.
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And while consumers spent more freely over Christmas, the outlook’s rather nervous from both a consumers and business perspective.
But the big reading, based on responses from 3,200 UK consumers aged 18+ between 3-6 January, showed sentiment towards personal levels of debt rose by a significant 6 percentage points this quarter compared with Q4 2023.
However, the improvement in confidence in debt levels didn’t compensate for a fall in sentiment towards disposable income with a four percentage points drop to -26%.
Overall consumer confidence in the state of the UK economy also fell significantly in Q4 (-13.6 percentage points), indicating that consumers are nervous about the impact of higher business taxes on their income and prices at the till.
It also said the sentiment of senior business leaders weakened in Q4 as CFOs expect to introduce cost-cutting measures in the next 12 months, “including the sharpest fall in hiring expectations since the pandemic”.
Meanwhile, consumer sentiment towards job security and job/career opportunities also fell in the final quarter (-1.0 and -0.8 percentage points respectively) in a sign that consumers are also concerned about the prospects for the jobs market.
But back to what happened in Q4 and the report showed that during Christmas, 42% of consumers said that they spent more than they did in the previous year, “in a sign that consumers are loosening their purse strings”.
While 35% said they spent more on gifts, 54% who spent more this Christmas overall attributed it to higher prices. Similarly, 44% of consumers said they had less to spend, “signalling that increased expenditure was not necessarily a sign of consumers’ propensity to spend more”.
Some 40% also said they did their Christmas shopping before December, “which could have been a tactic to spread the cost of the festive season”. Over a third (37%) said they bought more gifts on discount including at Black Friday events and more food (43%) using promotions and loyalty cards discounts.
Some 52% agreed that they were generally more frugal and careful this Christmas, while 50% agreed they consciously cut down on any luxuries.
But the level of discretionary spending in the last three months “continued into positive territory following several years of negative growth”, noted Deloitte.
Céline Fenech, consumer insight lead at Deloitte, said: “While many consumers appear to be feeling better about paying debts or borrowing following the cuts to interest rates, concerns around disposable income and prices of essentials remain.
“Consumers continue to look for value and make compromises following a once in a generation surge in costs that has diminished consumers’ spending power. Many consumers continue to compare today’s higher prices to those of pre-pandemic, regardless of the rate of inflation falling.”
She added: “We expect consumer confidence to continue to recover this year alongside improving economic conditions. For their confidence to improve further, consumers will want to see what happens next to the cost of financing their debts, their ability to save, the prices of essential items and their job security.”
Ian Stewart, chief economist at Deloitte, added: “Growth has been more sluggish than expected in recent months and our survey of CFOs shows that finance leaders are feeling less optimistic and are focused on reduced costs. Despite a challenging start to the year, we expect to see growth coming back over the summer, with interest rate cuts, rising real incomes and buoyant government spending helping drive the recovery. For 2025 as a whole we expect UK GDP growth to come in at around 1%, a rather better outcome than last year.”
Oliver Vernon-Harcourt, head of retail at Deloitte, concluded: “As many grapple with an inflation hangover, consumers likely need more time to digest the volatility and uncertainty of the last few years. Consumer recovery this year will depend on what happens with inflation, especially in the more essential categories like food. With our research showing that 80% of consumers still expect prices to go up further in 2025, consumer demand is likely to remain subdued while things settle in the first half of the year.
“Beyond that, with factors such as the rise in the minimum living wage, more public spending, easing monetary and fiscal policies – combined with consumer confidence hopefully continuing to recover — we should see demand improving especially in the more discretionary categories.”
Giving hope to many middle-aged men, David Beckham (49) stars in the new Boss intimates campaign, as the fashion brand stages a major launch of its new Boss One Bodywear collection.
Designed by the Team Laird agency, the campaign’s directed by fashion photography duo Mert and Marcus who apply their distinctive cinematic style to both video and stills of Beckham, who’s first seen pulling up in a classic sportscar and entering a New York City warehouse apartment. On screen, Beckham invites the viewer in (to the beat of the rock anthem In the Air Tonight) before revealing himself wearing just the new black Boss One Bodywear trunk.
The launch is supported by a 360-degree marketing campaign. In a brand first Beckham will appear before audiences in cinemas and at home, appearing in campaign clips on the big screen and on streaming platforms such as Amazon Prime, Netflix, HBO Max, Paramount Plus, and Sky TV.
Stills of Beckham will appear on billboards and in selected high-traffic locations, as well as in Boss stores and department stores around the world. On social media, the campaign will see close to “100 talents of the moment” show off their Boss Ones across various platforms.
Also as a debut for the brand, vending machines will be placed at key locations in Europe and the US, selling hero products from the collection “in a fun, interactive way”. Additionally, over 100 dedicated pop-ups will appear in premium retail locations worldwide, featuring the complete first drop.
The collection consists of men’s underwear essentials, including trunks, briefs, tank tops and T-shirts in minimalist black and white. Crafted from a blend of cotton and elastane, the selection “offers all-day comfort and confidence”.
It will be available on boss.com, at dedicated pop-ups, at Boss stores globally, and via selected wholesalers from 1 February.
Daniel Grieder, CEO of Hugo Boss, said: “The launch of the Boss One Bodywear collection marks another milestone and a new chapter in our long-term strategic partnership with David Beckham.
“It is also a testament to our joint dedication to style and excellence. Bodywear is an iconic product group, and with this campaign, we aim to inspire customers and fans of the brand worldwide more than ever.”
With cost remaining a decisive factor for consumers, M&S said Friday (January 31) it’s continuing to cut prices of over 300 “family favourite” products with kidswear the latest target.
M&S
The high street retailer said it “re-affirms its commitment to delivering trusted value and everyday low prices on the products that matter most to its 32 million customers”.
The latest cuts include an up to 20% price reduction on over 100 products from its ‘everyday essentials’ Kidswear range.
Key pieces include its Cotton Rich Hoodie and Joggers as well as range of Sweatshirts, Leggings and T-Shirts which now start from £5.50, with the retailer saying the reduction in price will not compromise on the “quality or high sourcing standards it is known for”.
Alexandra Dimitriu, Kidswear director, Clothing & Home, said: “Now more than ever, customers are looking for trusted value. When it comes to clothing, we know value is more than just the product’s price – they also want confidence that it is made well and made to last and offers versatility.”
M&S reported positive figures for its festive trading period with total group sales increasing 5.6% to £4.064 billion, but much of the strength was concentrated in the Food area with Clothing, Home & Beauty, rising just 1% to £1.305 billion, with like-for-like sales rising ahead of the market at 1.9% as underlying sales grew 2.6%.
Burberry announced a key appointment on Friday with the luxury business saying it will soon have a new chief information officer.
Charlotte Baldwin
It has appointed Charlotte Baldwin to the role and she’ll join the business at the end of March. Baldwin will be responsible for leading Burberry’s global technology team and will join the executive committee. She’ll report directly to Burberry CEO Joshua Schulman.
He described her as “a highly experienced technology and digital leader with a track record of leading large-scale digital transformation”.
She hasn’t previously worked in the luxury fashion sector but has wide-ranging experience across some major-name businesses in Britain.
She’s currently the global chief digital and information officer at coffee chain Costa Coffee where she oversees the company’s technology, digital and data organisation.
Prior to joining that firm, she was the chief information, digital and transformation officer at private healthcare giant Bupa’s Bupa Insurance unit. She’s also held senior roles at Freshfields Bruckhaus Deringer, Pearson and Thomson Reuters.
Burberry has been navigating a tough period of late and Schulman joined in the top job last year, tweaking the firm’s strategy. His approach seems to be paying off with the company last week porting improved results, although the turnaround is still undeniable a work in progress.
Entertainment8 years ago