Post Brexit consumer confidence falls to new low

If the falling sterling and general mood of the UK weren't sufficient enough to summarize the effects after the Brexit referendum outcome, the GfK Consumer Confidence Barometer confirmed it had plunged to new depths as its index fell 8 points to -9, the sharpest drop in 21 years.

Splitting the core Index result by how people said they voted in the referendum, Remainers were at -13, versus Leavers who were more optimistic at -5. The survey was run from June 30 to July 5 to capture the mood of consumers immediately after the Brexit decision on June 24.

Joe Staton, Head of Market Dynamics at GfK, says: “In these extraordinary times this one-off CCB Brexit Special gauges the temperature of consumer confidence right now. During this period of uncertainty, we’ve seen a very significant drop in confidence, as is clear from the fact that every one of our key measures has fallen, with the biggest decrease occurring in the outlook for the general economic situation in the next 12 months.”

The main concern is how the UK will fare now that it has ostracized itself from Europe and the laws of Brussels. Consumers are concerned about possible economic aftershocks as people believe prices will increase in the next 12 months.

Consumer confidence varies per region

As was to be expected with the Leavers and Remainers being linked to certain regions, there are similar differences with how confidence is seen in these regions. In London, for example, which voted overwhelmingly to Remain, there was a 2 point drop. In Scotland this was 11 points and in the North 19 points. The most optimistic group are the 16-29 year old who's confidence dropped 13 points.

Joe Staton continued: “Our analysis suggests that in the immediate aftermath of the referendum, sectors like travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending. As we’ve learnt from previous periods of uncertainty, consumers turn to well-known brands they love and trust as a guarantee of quality and value for money. Now is the time for companies to understand and respond to consumer concerns by anticipating and meeting their needs.”

Image: Brexit