Commenting on the latest ONS retail sales and GfK’s latest consumer confidence insights, Linda Ellett, UK head of consumer markets at KPMG, said.
“The easing of lockdown in June saw retail sales improve, but as the latest consumer confidence insights also make clear, consumers and consumer businesses have a long journey ahead of them – and that will be full of volatility and challenge. The recovery of consumer confidence appears to have plateaued, perhaps as consumers worry about the threat of job losses as the furlough scheme begins to unwind. Whilst for now most consumers will be reconsidering their spending, as the months ahead make clear who is affected and who not, we hope to see confidence increase.
“It’s not all bad news though. This could also present an opportunity for those consumer businesses willing to adapt to this new spending pattern. Value retailers are likely to become more popular in the eyes of financially strained consumers, while other consumers may even see the easing of lockdown as a long-awaited opportunity to treat themselves. The increased use of online has also opened up an array of businesses that may have been overlooked by less tech savvy shoppers previously.
“Much of the focus has been on leisure, with restaurants and pubs only just finding their feet. August will see the ‘eat out to help out’ initiative come into force, which could well nudge customers back through the door. Added to that, the likely rise in staycations is likely to offer a helping hand too. The key will be getting consumers out so they can see that the necessary safety measures do not prevent an enjoyable experience. Thankfully consumers have in the main been supportive of businesses’ efforts on that front so far.
“The customer that businesses are trying to win over has fundamentally changed as a result of COVID-19, and that means business propositions will need to adapt accordingly. That’s going to require a great amount of reinvention and creativity in the coming months, but marrying those up with your bottom line is of course, much easier said than done.”
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