Britain’s discretionary spending records a three-year high

January 28, 2015 | By RetailME Bureau

Falling inflation and an improving labour market are starting to put more money in consumers’ pockets, indicates Deloitte Consumer Tracker. Two factors are underpinning consumers’ confidence in their level of disposable income, which remains stable for the third consecutive quarter (-18%), and is nine points higher than for the same period in 2013. In the fourth quarter of 2014, fewer people suffered a reduction or a loss of income, and more said they had received a pay rise or bonus than a year ago (11% and 14%, respectively, vs. 13% and 11% in 2013).

Consumers’ finances have been boosted by the lowest rate of inflation in 14 years. Falling prices for food, energy and petrol, imply consumers are paying less for essentials (9% spending more vs. 15% in Q4 2013), freeing more disposable income for discretionary and big ticket purchases such as major household appliances (-3% vs. -5% in Q4 2013) and going out (-9% vs. -15% in Q4 2013).

“Lower inflation and higher wages are having a pronounced effect on consumer spending behaviours. Categories such as hotels and restaurants or consumer technology have really benefited from consumers feeling less of a squeeze on their disposable income. In comparison, net spending on utilities and groceries is growing more slowly than consumer spending overall, a reflection of falling fuel prices at the pump and the grocery sector’s intense price competitions,” shares Ben Perkins, head of consumer business research at Deloitte.

However, while the long-term trend in consumer confidence is up, short-term uncertainties have emerged. In the fourth quarter of 2014, overall consumer confidence fell three points compared with the previous quarter (-8% vs. -5% in Q3 2014). This dip reflects weaker sentiment about health and wellbeing and job security.

“Although consumers have turned more positive on prospects for incomes in the last year, continued uncertainties seem to be affecting their wider perceptions of their welfare. This appears to echo the finding of Deloitte’s latest survey of Chief Financial Officers (CFOs), which shows that while CFOs are upbeat on the UK economy, external factors such as the UK General Election and uncertainty overseas, have dampened confidence,” reveals Ian Stewart, chief economist at Deloitte.

“For the UK consumer the sort of transient deflation caused by lower oil and other commodity prices will be a significant positive in 2015. Growth in real wages is set to accelerate further. Chief Financial Officers report that they expect employee earnings in their businesses to rise significantly faster than inflation this year. This recovery in disposable incomes points to a further acceleration in the growth of UK consumer spending in 2015, with discretionary categories likely to do especially well.”



Previous Article Next Article


Union Coop, a consumer cooperative in the UAE, revealed that 78% of 

Continue Reading

August 24, 2021 | By Jibran Chouguley

Union Coop has opened its 23rd branch within the UAE in Jumeirah 

Continue Reading

August 2, 2021 | By Jibran Chouguley

Nando’s has revealed their revamped Sheikh Zayed Road outlet where newcomers and 

Continue Reading

July 8, 2021 | By Jibran Chouguley

UAE-based Al Maya Group announced that it will be boosting import of 

Continue Reading

June 24, 2021 | By RetailME Bureau

UAE-based grocery retail chain, Grandiose has opened its first hypermarket in Abu 

Continue Reading

June 2, 2021 | By RetailME Bureau

UAE-based Carrefour announced its theme and plans for Ramadan 2021. The brand 

Continue Reading

March 31, 2021 | By RetailME Bureau

Locally owned supermarket Spinneys celebrates 60 years of doing business in the 

Continue Reading

March 9, 2021 | By RetailME Bureau
Almarai, Carrefour, Emirates have the most loyal customers

UAE-based Carrefour will become the first retailer in the region to offer new levels 

Continue Reading

February 22, 2021 | By RetailME Bureau

The Organic Farmers’ Market is back in Bay Avenue for its 12th 

Continue Reading

February 17, 2021 | By RetailME Bureau

UAE-based  Lulu Group recently inaugurated its first-ever all-female staff store in Jeddah, 

Continue Reading

February 15, 2021 | By RetailME Bureau
Jones the grocer

Jones the Grocer, the gourmet grocer and cheese retailer launches the Jones 

Continue Reading

February 1, 2021 | By RetailME Bureau

UAE-based Al Maya Supermarkets is hosting a two-week food festival at select 

Continue Reading

January 17, 2021 | By Lawrence Pinto

Download Images RetailME Magazine