According to GfK’s monthly consumer confidence index, consumers are spending less and saving more as the economic impact of the coronavirus pandemic becomes clearer.
The index shows that major purchase intent came in at -26, far below the score of four in the same month last year, although it is an improvement on June’s score of -32. Meanwhile, the savings index was up five points month on month to 21, although this was slightly behind the 25 that was measured in July 2019.
"Now is a great time for brands to restate their value and values, to reinvent and reposition themselves as more relevant during these times, in order to unlock hearts, minds and wallets"
It’s clear that consumers are starting to feel more optimistic about their own financial situation, with the score for the next 12 months up four points to zero compared with June. Thinking about the past 12 months, consumers raised their score by five points to -4. However, perceptions for the economy as a whole are improving at a very slow rate. Views on the general economic situation over the past 12 months fell two points to -61 and remain a lot lower than the same time last year, when they measured -32.
GfK’s client strategy director Joe Staton, stated:
“The way we perceive our ‘future wallets’ is key as it’s the one area over which we have day-to-day control and is a good indicator of our personal financial outlook for the year to come” and, as the data suggests, people are responding to these economically difficult times by being cautious with their money and saving during lockdown.
However, some sectors, such as food and drink, DIY and online are already beginning to see increases again, suggesting there are opportunities if brands are able to strike the right note with consumers.
“The fact consumers are currently more optimistic about their personal financial situation for the coming year should turn some savings into spending. Now is a great time for brands to restate their value and values, to reinvent and reposition themselves as more relevant during these times, in order to unlock hearts, minds and wallets,” says Staton.