“Confidence in the state of the economy dropped significantly, falling 8 points to -27,” stated Dr. Kris Hamer, Director of Insight at the British Retail Consortium (BRC). “This is the lowest level we’ve recorded since we began the monitor in March 2024.”
Dr. Hamer highlighted a growing disparity in consumer sentiment, explaining, “There is a widening gap between expectations of the economy and of people’s own finances, which remained unchanged.”
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He noted that age played a pivotal role in shaping perceptions: “Perceptions were heavily skewed by age, with 18–35-year-olds considerably more upbeat than older generations on both questions.”
The timing of these figures, during the crucial Golden Quarter for retail, underscores significant challenges for businesses. “The public’s spending intentions over the next three months – both in retail and beyond – fell 6 points, with expectations of spending in nearly every retail category falling,” Dr. Hamer added.
Online shopping dominates Black Friday
Reflecting on the 2024 Black Friday weekend, Dr. Hamer observed a major shift in shopping habits.
“Those who purchased did so overwhelmingly online rather than in-store for every non-food category and spent more than they intended in all categories, consistent with the behaviour we reported in the last edition,” he said.
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By GlobalDataRetailers appeared to succeed in appealing to consumers amidst economic challenges. “Customers thought that deals were better this year than last year, showing that retailers have been working hard to win market share in a tough economy,”
Dr. Hamer explained. However, participation varied widely by age: “Three-quarters of boomers said they didn’t purchase anything, while only around a third of Gen Z didn’t shop.”
Larger retailers attract festive shoppers
Dr. Hamer also shed light on festive shopping patterns, revealing a preference for larger retail outlets.
“During the festive season, of those that shop in-store, 52% reported shopping in ‘All Large’ or ‘Mainly Large’ stores, while only 9% shopped in ‘All Small’ or ‘Mainly Small’ shops,” he noted.
“This shows that shoppers enjoy a mix of stores, especially those where they can tick off lots of items off their list in one place.”
As 2025 begins, the insights from Dr. Hamer paint a stark picture of the UK’s retail landscape. Consumer confidence remains fragile, and retailers must adapt to evolving shopping behaviours while navigating ongoing economic uncertainty.
