It’s a tricky business trying to gauge consumer emotions/confidence at this time of year but the outlook for January and the wider first quarter looks bleak, driven by a bigger-than-usual squeeze on spending, according to the British Retail Consortium (BRC).

As series of negative readings in the latest BRC-Opinium report show consumer expectations for the next three months are pretty negative, with older consumers particularly downbeat.

The personal financial situation has remained at -3 in December, the same as in November, but the consumer outlook for the state of the economy worsened to -27 in December from -19 in November.

Personal spending on retail fell to -3 in December from +3 in November while general personal spending overall dropped to +11 in December, down from +17 in November.

In anticipation of some severe belt-tightening, personal saving increased to -5 in December, up from -9 in November.
 
Helen Dickinson, chief executive of the BRC, said: “Public confidence in the state of the economy took a nosedive, falling eight points. This created a widening gap between expectations of the economy and of people’s own finances, which remained unchanged. 

She noted that perceptions were heavily skewed by age, with 18-35 year-olds “considerably more upbeat than older generations on both questions”.

She added: “The public’s spending intentions – both in retail and beyond – dropped… with expectations of spending in nearly every retail category falling. If these expectations are realised, retailers could find themselves facing a new year spending squeeze just as they unveil their January sales.

“The weak spending intentions could pave the way for a challenging year for retailers, who face being buffeted by low consumer demand and £7 billion of new costs from the Budget set to hit the industry in 2025.”