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Deloitte consumer tracker q4 2017
The Deloitte Consumer Tracker Q4 2017 indicates that consumer confidence in the UK remains flat at -7%, marking the first quarter without a decline since the survey's inception. Despite economic challenges, there are signs of consumer optimism, particularly regarding disposable income and debt levels, with an expected rise in real-wage growth for 2018. Retail sales were disappointing in December, attributed to rising inflation and low wage growth, but consumer spending intentions for the upcoming quarter show increased confidence compared to previous years.
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Deloitte consumer tracker q4 2017
- 1. The Deloitte ConsumerTracker Q4 2017 Charts and analysis January 2018 Key indicators Q4 2017
- 2. The Deloitte ConsumerTracker Q4 2017 Key indicators Previous Latest -7% -7% Overall consumer confidence (q/q)* Previous Latest -21% -17% Confidence in level of disposable income (q/q)* Previous Latest -4% -3% Confidence in levels of debt (q/q)* Previous Latest -4% -3% Confidence in job security (q/q)* *Net balances
- 3. Consumer confidence has remainedflat compared to Q3 Consumer confidence has remained at -7%. This is the first time since our survey began that Q4 has not seen a decline in confidence Deloitte consumer confidence Net % of consumers who said their level of confidence has improved in the past three months Source: Deloitte Consumer Tracker Q4 2017 -20% -15% -10% -5% 0% Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4 2012 2013 2014 2015 2016 2017 -1% 0%
- 4. Consumer confidence aboutjob security Net % of consumers who said their level of confidence has improved in the past three months -18% -16% -14% -12% -10% -8% -6% -4% -2% 0% 201720162015201420132012 -20% -18% -16% -14% -12% -10% -8% -6% -4% -2% 0% 201720162015201420132012 Consumer confidence about your general health and wellbeing Net % of consumers who said their level of confidence has improved in the past three months Consumer confidence about job opportunities and career progression Net % of consumers who said their level of confidence has improved in the past three months -18% -16% -14% -12% -10% -8% -6% -4% -2% 0% 201720162015201420132012 -18% -16% -14% -12% -10% -8% -6% -4% -2% 0% 201720162015201420132012 Consumer confidence about your level of debt Net % of consumers who said their level of confidence has improved in the past three months -45% -40% -35% -30% -25% -20% -15% -10% -5% 0% 201720162015201420132012 Consumer confidence about your household disposable income Net % of consumers who said their level of confidence has improved in the past three months Individual measures of consumer confidence tell a mixed story Three measures report growth and two report a decline in confidence, with consumers reporting growing confidence in their level of debt and their disposable income
- 5. Deloitte consumer confidenceabout job security, job opportunities and career progression Net % of consumers who said their level of confidence has improved in the past three months -15% -12% -9% -6% -3% 0% 201720162015201420132012 Your job security Source: Deloitte Consumer Tracker Q4 2017 Your job opportunities/career progression Individual measures in focus The UK is experiencing record levels of unemployment and confidence in job security is growing, but why are consumers losing confidence in their potential job opportunities and career progression?
- 6. UK consumer sentimentabout personal situation Net % of consumers who said their level of confidence has improved in the past three months -40% -30% -20% -10% 0% 10% Your job opportunities /career progression Your house hold disposable income Your general health and wellbeing Your level of debt Your job security Q4 2012 Source: Deloitte Consumer Tracker Q4 2017 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 -12% -6% -7% -6% -4% -3% -12% -10% -4% -4% -3% -3% -15% -12% -16% -17% -16% -15% -33% -27% -18% -11% -14% -17% -13% -8% -6% -5% -2% -3% A YoY view of individual measures tells a different story Consumers are more confident about their general health and wellbeing compared to Q4 2016, but they have suffered a -3% point fall in confidence in their disposable income over the last year
- 7. Average earnings includingbonuses Growth in average wages vs CPI Inflation % change year-on-year UK inflation (CPI) Source: Thomson Reuters DataStream -3 -2 -1 0 1 2 3 4 5 6 2017201620152014201320122011201020092008 Consumers felt a squeeze in 2017 as average earnings growth ran lower than inflation After the first rate rise in a decade, there are signs that inflationary pressures will ease in 2018, but in Q4 the gap between inflation and wage growth continued to negatively impact consumers
- 8. Food & Non-alcoholicbeverages Housing, Water & Fuels Furn, HH equip & Repair of the house Recreation & Culture Miscellaneous goods & Services Clothing & Footwear Communication Health Alcoholic beverages, Tobacco & Narcotics Hotels, Cafes & Restaurants Transport Education Total inflation Inflation % change year-on-year Source: ONS 2.8 3.1 1.0 0.8 4.3 2.8 0.9 2.7 1.7 1.0 3.7 3.8 2.4 3.2 0.6 3.2 0.4 2.3 1.2 3.1 2.4 5.6 -1.1 3.9 1.6 3.0 15/12/16 15/12/17 Inflation has seen prices rise significantly compared to last year Food and Drink as a category saw year-on-year inflation of 3.9% in December forcing consumers to be more careful with their spending
- 9. Retail sales (excl.fuel SA) % change in volume and value year-on-year -2% -1% 0% 1% 2% 3% 20172016201520142013201220112010200920082007 Source: Thomson Reuters Value Volume Retail sales disappointed in Q4 Growth figures were lower than expected and the amount of promotional activity during the festive period calls into question the profitability of this period to retailers
- 10. Essentials vs discretionaryspending Net % UK consumers spending more by category -20% -15% -10% -5% 0% 5% 10% 15% 201720162015201420132012 Essentials Discretionary Consumers reported spending more on both essential and discretionary goods The quarter on quarter growth was driven by inflation and the Black Friday/Christmas shopping periods. YoY results show a different story, with discretionary spend down vs Q4 2016
- 11. Category spending inthe last three months Net % UK consumers spending more by category Q4 2015 Q4 2016 Q4 2017 -15 -10 -5 0 5 10 15 20 25 30 35 40 45 Going out Furniture & homeware Restaurants & hotels Major household appliances Holidays Electrical equipment Clothing & footwear Alcoholic beverages & tobacco Landline/mobile phone, internet & cable/TV subscriptions Housing Transport Utility bills Grocery shopping for food & non-alcoholic beverages Consumers suffered from increased prices in 2017 Spend on food and drink, and utility bills went up significantly compared to last year. Going out and other discretionary categories have suffered as consumers prioritise their spend elsewhere
- 12. Category spending overthe next three months Net % UK consumers spending more by category -20% -15% -10% -5% 0% 5% 10% Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4 Big-ticket itemsEssentials Deloitte Consumer Tracker Q4 2017 Small-ticket items 2012 2013 2014 2015 2016 2017 However, there is some optimism about spending over the next 3 months With Black Friday and Christmas falling in Q4, consumers are naturally expecting to spend less in the next 3 months. However, spending intentions for the next 3 months are higher at this point than in previous years
- 13. Summary Consumers continue toshow resilience. Consumer confidence is flat compared to Q3 2017 and the UK economy is facing a number of headwinds, but there are reasons to be optimistic about 2018 • 2017 was a tough year for consumers with rising inflation, low wage growth and concerns about debt • A difficult 2017 culminated in disappointing retail sales in December • Brexit uncertainty remains and the UK economy continues to struggle when compared with the growing Global economy However… • Consumer confidence is flat compared to the previous quarter – the first time since our survey began that confidence did not decline in Q4 • Inflation fell in December for the first time in 6 months and this trend looks set to continue • Consumers are beginning to show more confidence in their disposable income and about their ability to service their levels of debt • Real-wage growth is expected to rise in 2018, providing a boost to the consumer economy in the form of increased confidence and spending power
- 14. This publication hasbeen written in general terms and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this publication. Deloitte LLP accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London, EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom affiliate of Deloitte NWE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NWE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms. © 2018 Deloitte LLP. All rights reserved. Designed and produced by The Creative Studio at Deloitte, London. J14637 About this research The Deloitte Consumer Tracker is based on a consumer survey carried out by independent market research agency, YouGov, on our behalf. This survey was conducted online with a nationally representative sample of over 3,000 UK adults aged 18+ between 05 January and 10 January 2018.