Customers are still spending, despite consumer confidence crisis according to Mark Heckels, Managing Director of Ideal4Finance. In our latest blog, Mark shares his insights on the current economic situation.
Retailers and other businesses across the UK are facing the dual challenge of plummeting consumer confidence alongside a weakened pound, leading some to pull-back on their sales forecasts for the coming year.
It was no surprise to anyone that the latest research from consumer behaviour thinktank, GfK, showed consumer confidence to be at an all-time low in September. As well as being deeply concerned about their personal finances, people are pessimistic about the general economic outlook for the UK.
Working with businesses and talking to them daily, we’re aware of their concerns and understand the challenges they are facing.
The general feeling is that, whilst people will spend on essential home improvements, such as a leaking roof or faulty boiler, there would be little appetite for discretionary spending, on those unnecessary or luxury items a household can do without.
A snapshot of our loans activity during September, however, suggests that consumers are still purchasing across all sectors. Home improvements made a strong showing as always but there were also significant sales in some more unexpected quarters, including jewellery, classic watches, hot tubs, family portrait photography and aesthetic treatments.
We think this demonstrates that people are still prepared to spend, but they want to make sensible purchasing decisions, and often want to use a flexible payment option which enables them to keep hold of their savings.
For consumers facing a cost-of-living crisis, the ability to ease the burden of purchase with affordable monthly payments is more important than ever. Responsible and credible customer finance products can offer businesses a way through what can feel like uncharted waters.
Last month, in addition to the sectors already mentioned, we processed loans for customers purchasing kitchens, bathrooms, windows, doors, conservatories, plumbing, heating, carpets, flooring, staircases, furniture, beds, security systems and landscaping, as well as cycles, sporting goods and skills training.
We are keen to emphasise that we are not playing down concerns over the economic outlook but we do see some reason for cautious optimism amongst businesses.
We know these are challenging times and we’re certainly not suggesting that people’s worries are unfounded, but we are definitely encouraged by what we have seen in September, and we want to share those encouraging signs with other businesses.
Mark Heckels, Managing Director