Consumer Confidence Improving, Business Growth Could Boost Spending

25th April 2018.

The agreement of a Brexit transition deal boosted overall confidence during the first three months of the year, according to professional services provider, Deloitte.

Consumers are still reigning in their spending, with many penny-pinchers hesitant to spend on anything but the absolute essentials, such as food and utility bills. While big-ticket items like furniture and appliances are disregarded by the conscientious consumer, with a transition deal with Brussels underway, consumer confidence could inspire a behavioural shift. As inflationary pressures ease, as well as uncertainty surrounding Brexit, consumers are more positive about their prospects and a change in spending behaviour could be on the horizon.

The warmer weather that Britons are experiencing as we enter Spring could lift spirits, with consumers glad to be free of the inconveniences of cold weather. With wage growth improving, as well as levels of employment, some households are happy to see a larger disposable income.

While business owners await the consumer’s return to the British high street, their focus should return to encouraging growth. Coaxing customers to loosen their purse strings will demand change, so expanding services and equipment would be a good place to start. At the Credit Protection Association, our debt recovery services provide our members with the financial freedom to afford new equipment and compete with high street rivals.

“It remains to be seen to what extent consumers will continue to exercise caution in 2018, and not-too-distant memories of tougher times could yet outweigh consumers’ willingness to spend,” commented Ian Stewart, chief economist at Deloitte.

Stewart added: “Confidence has crept up against a backdrop of consumer-friendly economic conditions. Unemployment has hit a 43 year low and is stoking wage pressures while falling inflation will boost consumer spending power and has eased the pressure for rate rises.”

Ben Perkins, head of consumer business research at Deloitte, said that the depression in spending posed additional challenges to some businesses which are already struggling.

“Consumer business, and in particular the retail and casual dining sectors have had to face unprecedented challenges over the last year,” he said. “Cautious spending, increased competition and rising labour and rental costs have been the cause of much head-scratching across the sector.”

With Brexit still looming over the country, the economy will have to work a little harder to stay ahead of the competition. While the economy looks positive at present, this is not assured to last the long-term, and business owners should be prepared for both worst and best scenarios. Stripping cash flow of late payers and residential debt is a positive first step, as well as approaching a credit manager to ensure you have conducted the correct credit checks to protect your cash flow and future prospects.

At the Credit Protection Association, our debt recovery services chase down unpaid invoices, while our credit checks and monitoring software make our members aware of exactly who they do business with. In this climate of the ‘retail apocalypse’, it is essential to credit check all suppliers and customers to protect cash flow and the financial future of the business.