No shift in North East consumer confidence

Consumer confidence in the North East has remained relatively static, according to research from Deloitte.

People in the North East were asked how they felt about their household disposable income. 48% chose “worse” - a figure almost unchanged from 2011.

Paul Feechan, office senior partner at Deloitte in Newcastle, said: “There’s an element of caution amongst consumers – purses have been tightened over the last few years and have remained so, but I’d expect to see confidence grow within the coming months.

“Findings from the next quarter will be the ones to watch. By then I’d expect to see the growing level of optimism we’re witnessing in the business community here in the North East, replicated in the consumer sector. It really isn’t all doom and gloom though, the broader picture shows things are moving in the right direction, there’s no reason for the North East not to follow suit and we hope it’s just a matter of time before the picture improves here.”

For the UK, the renewed confidence is slowly beginning to translate into a change in behaviour as consumers become less defensive in their spending habits. Last quarter, fewer consumers said they were trading down (25% vs. 28% in Q2 2012), bargain hunting (17% vs. 20%) or buying on sale (8% vs. 11%).

The Deloitte Consumer Tracker also shows a slightly greater willingness to spend on non-essentials such as leisure activities. Last quarter, fewer consumers were spending less on holidays, eating out at restaurants and going on short breaks.

Ian Stewart, chief economist at Deloitte said: “The UK consumer is past the worst and sentiment is gradually improving. We are picking up signs that consumers are less focussed on the shopping strategies they used to beat the recession, such as trading down, bargain hunting or buying on sale.

“If the economy continues to mend then we would expect this shift away from defensive behaviour to begin to translate into a greater willingness to spend.”

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