In March, slight improvements were noted in the economy and personal financial situations, with spending expectations, particularly among Gen Z, increasing. Despite a newfound optimism in retail spending, especially in DIY and home improvements, the looming financial burden from rising costs, including employer National Insurance and the National Living Wage, threatens the retail sector. Helen Dickinson emphasized that without government intervention to bolster confidence, rising prices may stifle economic growth further, particularly in the retail space, where Gen X is expected to cut back on spending.
Consumer confidence stabilised this month after February's record low. This was coupled with an increase in spending expectations for the three months ahead, both for retail spending and spending more generally.
Food and grocery spending expectations continued to outperform other categories, hitting a new high, though this could also be due to the expectation of rising prices.
Without a much needed confidence boost from government, the scale of new costs will see retail investment fall further, holding back future growth in the economy.
Across all categories, Gen Z (18-27) expected to spend more than the previous 3 months in every category, while Gen X (44-59) planned the biggest cuts to spending for most items, excluding food.
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