Alex Ward-Booth, director at Savanta, believes that while consumer confidence is improving across Europe, it remains in a delicate balance, with political unrest in France, Italy and to a lesser extent Spain weighing on confidence.
He said: “There is much better news in other markets in Europe this quarter, with a broadly improving picture in Germany, the Netherlands, the Nordic markets and particularly the UK, where perceptions of disposable income are currently at the highest levels we have seen since the post-Covid rebound in 2021.”
Savanta’s quarterly survey of 3,500 European consumers across the UK, the Netherlands, Germany, France, Spain, Italy and the Nordics, conducted in June 2024, revealed three key themes:
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The percentage of people in all markets who are more confident about the economic situation in their country has increased significantly during this period. However, overall confidence remains fragile.
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Spending remains focused on essentials, pointing to continued pressure on household budgets.
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Technology adoption in retail is relatively low in some sectors, but this is likely to change as younger generations become more comfortable with digital options. However, brands must ensure that a personal touch is maintained in their technology solutions.
State of consumer spending
The report tracked the progress of four consumer groups, defined by socio-economic attitudes, looking beyond demographics to understand consumer resilience to economic downturns: isolated, cautious, trapped and impacted.
According to the report, the composition of these resilience groups has remained relatively stable, although in Germany there has been a significant decline in the ‘patient’ segment, with targeted growth in both the ‘cautious’ and ‘isolated’ segments.
A large proportion of respondents fall into the “cautious” category, with Italy and Germany leading at 45% and 44% respectively. This category is described as being “a little more cautious” with spending and saving a little more.
The next largest group is the “squeezed” category, with Germany having the highest percentage at 28%, followed by the Nordic countries and Italy at 27% each. This group is defined as those who “take action to buy cheaper brands and/or go to cheaper stores.”
The third largest group is the “isolated” category, dominated by respondents from the Netherlands and the UK, at 21% and 20% respectively. This group is made up of those who are “not really affected” by the problems of the wider economy.
Finally, the category of “sufferers” is led by Spain and France with 19%. This group includes people who have “reduced all their expenses” because they are worried about the future.
Key insights from the UK market
The report shows that overall confidence among UK consumers continues to grow steadily.
The report’s authors highlight that, against the backdrop of easing inflationary pressures and the run-up to the general election, UK consumers’ perceptions of disposable income are at their highest since late 2021.
However, they believe that confidence in the economy and employment remains fragile, reflecting the continued uncertainty about the future of this market.
The data also showed that in the countries surveyed, consumer spending showed little change from the previous quarter. It remains subdued, focused mainly on essentials, with “fashion” coming in second due to the significant impact of inflation.
Results released by the National Retail Federation (NRF) Retail Monitor for the month of June Research has found that US apparel sales fell in June from the previous month but rose year-on-year as consumers deprioritized non-essential purchases.
“In data: Survey shows consumer confidence is declining in France and Italy” was originally created and published by Just Stylea brand of GlobalData.
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