Panic mode sets in after consumer expectations for 2021 dip

by Administrator
7 replies
A new article on MarketingWeek reports that the most recent Consumer Confidence Barometer from Gfk has found a significant dip in consumer confidence, and a lack of hopefulness that things will begin to improve on a personal and wider level over next year.

Research was conducted between October 1-14, and the index measuring changes in personal finance over the past year recorded a shocking drop of two points to -9. In comparison to pre-pandemic times, this result was 10 points lower than recorded in October 2019. The prediction for the upcoming 12 months is down one point to zero, a point lower than the same month last year.

Taking a glance at the current state of the economy in general, we can observe a six-point fall in confidence to -67, which is an alarming 34 full points lower than what got recorded a year ago. Forecasting the next 12 months, confidence is down by a further 12 points to -50, meaning 13 points lower than last October.

Taking a look at the major purchase index, which records consumer intention to buy larger, more expensive goods like electrical equipment, that's down by six points to -27, which is 28 points lower than the measurement at the same time last year.

Client strategy director for GfK, Joe Staton, comments on the expectation stat specifically, calling it "worrying".

Staton also gives notice of a potential double-dip in consumer confidence in the UK, saying that many people face a struggle in the period leading up to Christmas, shrouded in uncertainty regarding possible increased restrictions and personal finance issues.

Staton adds:

"This is news we could do without at any time of year, but in the run-up to the traditional Christmas spending season it's a particularly unwelcome spectre at the feast".
#2021 #consumer #dip #expectations #mode #panic #sets
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  • Yeesh. Outlook certainly gloomy (understandably so for many folks), and wouldn't appear to bode well for spending patterns for many business owners. That said, I'm going to opt to choose to be optimistic the Zombie apocalypse won't last forever, and that science / human innovation perseveres!
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  • Profile picture of the author Kay King
    Forecasting the next 12 months, confidence is down by a further 12 points to -50, meaning 13 points lower than last October.

    In the US, at least - 12 months ago we had a roaring job market and stock market, very low unemployment...peole were earning and spending.

    I don't think it is any form of 'panic' - but I think realism has set in for many people at this point. Heading into the 8th month of 'pandemic all day every day' the hope that the crisis would 'disappear' has faded...the conviction that the crisis is only a temporary glitch is clearly not the case.... The 'temporary closures' have become permanent for many small businesses - and there is no end in sight.

    12 months after an economy that was setting new records - we have an economy partially shut down due to a pandemic we can't control. Daily we are being told 'this will only get worse'...What is there for consumers to be optimistic about?

    People are tired and scared; they are frustrated and angry. My prediction is that 'after Christmas sales' may begin before Christmas and will be some of deepest price cuts we've seen in years.
    Saving one dog will not change the world - but the world will change forever for that one dog.

    I wish offended people would react like fainting goats and quietly tip over.
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    • I (unfortunately) don't necessarily disagree with this - particularly the point about businesses closing permanently and folks feeling scared/tired/beaten down. My "optimism" is in the grand scheme - that regulators worldwide will acknowledge and internalize that we can't longer afford to bog down the development of things like vaccine development, DNA diagnostic development, etc with endless red tape and regulatory permissions. We've now seen that we're capable of quickly approving new ventilators and other medical devices, and also that we can rush vaccines through clinical trials quickly ... perhaps this can lead to a new normal that's more inviting of, and conducive to, the kind of innovation that will enable us to deal with future biothreats in a much more prepared/productive way.

      But over the short and even midterm (and as a friend who'd run a very successful Halloween business recently lamented), yeah, outlook's pretty dreary indeed.
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  • Individuals are affected by economic turndowns. But a business is built on its customers. And most customers are just fine.

    Specific businesses are affected by the pandemic. I wouldn't want to be a bar, restaurant, gym, or event center right now....which only leaves a million other businesses that are doing just fine.

    In 2008, the Recession hit, my business was cut in half, and I immediately began promoting the store online....something I hadn't really done before. In the next few years, we grew back bigger than ever......and I learned a lot in the process.

    My guess is that there will be less Christmas shopping this year. So? Plan for it, adjust, adapt, compensate.
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  • Profile picture of the author writeaway
    Given the steady decreases in unemployment claim filings and the 33% unprecedented GDP rise in the 3rd quarter, the economy's recovery appears to be faster than what many economic observers expected.

    The question is, at this point in time, will it be a V shaped recovery or a K shaped one?

    Regardless, Amazon sales are trending up and it doesn't look like it's going to change trajectory anytime soon.

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  • Profile picture of the author Kay King
    Good points - I have always thought once the 'pandemic' slowdown was eased the economy would come roaring back...and I think that is what it's trying to do.
    Saving one dog will not change the world - but the world will change forever for that one dog.

    I wish offended people would react like fainting goats and quietly tip over.
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  • Profile picture of the author BryanOnline
    Okay, sales are down but not in every market. It may also be possible people are starting to realize we don't really need a bunch of stuff to be happy. Either way, people are/or should be investing and spending money on themselves as a person.

    Feed the brain and grow as a person. Let the news bring panic, look at what you can bring to the table and people will go. Make it a solution to a persons problem and they will buy it or make it just feel happy and good inside they will buy it.

    It doesn't matter, people will spend their money if they need too. Give them a reason and a solution and they will buy. You just need to be the where and why. Everyone has different views, but I hope this may help or at least put a different view on a few things. Enjoy the journey..!
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