Retail Trend Tracker: UK Consumer Sentiment June 2021

Globaldata’s Retail Trend Tracker: UK Consumer Sentiment June 2021 report provides an analysis of the future and present sentiment indexes, economic analysis, and financial outlook among others.

The current sentiment index fell 1.6 points from the previous month to 14.8. Five indices, including the main spending index, down 2.7 points, contributed to the decline From last month. The surge in delta variants and public concerns about a potential third wave in the UK may have led the public to rethink large-scale purchases. The future sentiment index rose 31.1 points year on year but fell 4.8 points month on month to 14.2. This investigation was conducted before formal confirmation that the full removal of the restriction would be delayed. Previous concerns about the more contagious Delta-COVID 19 mutant made many consumers pessimistic about this happening, leading to declining in future sentiments.

Crucial outlook on the prospects of consumer sentiment in the UK:

• Economic outlook declines in June following the spread of the Delta COVID-19 variant in the UK: The spread of the COVID-19 Delta variant in the UK has diminished the population’s view of future economic prospects, causing the economic index to drop 10.5 points last month to -9.0. Economic prospects weakened across all demographic parameters including gender, age, and social grade. However, there was a substantial difference between males and females, with females’ economic index drastically lower at -16.1 compared to males’ at -1.3. This difference could be ascribed to the fact that more females are likely to work in the hospitality and retail sectors than males. The impact of the COVID-19 pandemic on retail and hospitality sectors has been considerable, leading to the furlough of thousands across the UK, with the spread of the Delta variant many employed in those sectors are concerned about the economic implications

• The leisure activities index grew strongly on year and month as consumers divert spend for leisure activities: The leisure activities index amplified 39.4 points last year and 6.6 points last month to -11.3. The increase in this index can be credited to the success of the UK’s vaccine rollout, delivering over 74 million doses, leading to an increase in consumer confidence to go out to places such as restaurants and cinemas. Younger consumers were more likely to spend on leisure activities, perhaps due to feeling more confident about their job prospects now that hospitality and retail have opened. We expect to see a stronger development in the leisure activities index from July if the Government’s decision to remove all restrictions continues as planned for the 19 July. Once restrictions cease this will allow the hospiality sector to operate at full capacity and will result in the opening of nightclubs for the first time in over a year

• Food & grocery to help mitigate the decline of retail spending due to good weather and sporting events: The retail spending index increased 19.5 points on the year, however, declined 3.1 on the month to -28.6. All categories experienced a monthly decline except for food & grocery which grew 3.9 points in May 2021. Good weather throughout the UK, along with the start of the Euros bolstered food & grocery spending as people gathered together to enjoy the weather and watch sporting activities

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