Low levels of unemployment and rising wages may be a contributing factor in a boost in consumer confidence in the run up to Christmas.
New findings from PwC’s latest retail consumer survey found that just over a quarter of UK retail consumers believe they will be better off in the next 12 months.
That makes an improvement in sentiment compared with the same time last year and the beginning of 2018.
Ahead of the integral Christmas trading period, PwC polled 2000 adults aged 18 to 65 to find the number of consumers predicting they will be better off was marginally higher than those expecting to be worse off.
“Despite the recent negative indicators, both politically and economically, this may be a sign that consumer spending is more resilient than some observers expect, potentially buoyed by low unemployment and relatively high wage growth,” PwC consumer markets leader Lisa Hooker said.
“In the critical run-up to Christmas, the cautiously optimistic consumer could represent a major boost for high street retailers already facing headwinds generated by increased online competition, business rates and Brexit-related costs.”
Younger consumers were also markedly more optimistic about the years to come.
Between 2008 and the present day, PwC found that age is the most significant indicator of consumer sentiment, with younger people the most optimistic, likely down to their entry into the jobs market and expectations for advancement and earnings growth, as well as the fact that many may still live at home without mortgages or family responsibilities.
Variations in results by region have levelled out over the past ten years, and PwC’s results have found an initial North-South divide has dissipated over time.
“Interestingly, the two cohorts most positive about their historical fortunes are Pensioners and Millennials; indeed, over half of 25-34 year olds think they are better off today than they were 10 years ago, and fewer than a quarter think they are worse off,” PwC retail director Kien Tan said.
“The only age group which thinks it is worse off on balance than in 2008 are the baby boomers (55-64 year olds).
“Looking forward, the younger the respondent, the more optimistic their outlook.
“Younger people, in fact all age groups under 45, think they will be better off on balance in 10 years’ time, with only over 55s consistently negative,.”