Recent consumer behaviour has had a severe knock-on effect on UK business performance. Consumers are simply spending less and the penny-pinching sentiment has had a negative effect on consumer-driven industries such as retail and the restaurant sector. Consumer confidence has been softened by recent economic disruptions, such as high inflation and interest rate rises. A recent report has placed Brexit uncertainty at the top of the list, with consumers tightening purse strings while talks with the EU remain unresolved.
According to a survey conducted by accountancy group Deloitte, consumer confidence dropped by three points in the third quarter of 2018. Confidence has been knocked by recent economic behaviour, with household disposable income and debt level driving most of the anxiety.
The retail and restaurant sectors have experienced low profits and minimal footfall as consumers no longer occupy themselves with shopping sprees or retail therapy. High-profile retailers such as Toys R Us and Habitat have already collapsed this year, and others such as New Look have followed through with restructuring procedures to keep their doors open amid financial difficulty.
With the government making slow but steady progress with Brexit conciliation talks, political uncertainty should likely dissipate in the near future. To boost consumer confidence in the meantime, however, retailers should make the effort to gauge interest away from online retailers and back towards the high street.