The results of our latest Deloitte Consumer Tracker show signs of distress as consumer confidence continues to fall for the third quarter in a row. In particular, consumer confidence in disposable income and level of debt fell by seven and four percentage points respectively this quarter to reach their lowest level in over three years.
2. 2
Confidence suffers a significant 3 percentage point drop quarterly.
Consumer confidence is down for the third quarter in a row, back to levels seen
nearly three years ago (Q4 2013) and is two points lower than a year ago.
-20%
-18%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Overall consumer confidence
Q2 2017 Deloitte Consumer Tracker
3. 3
Individual measures of confidence
Five out of six measures of confidence fall significantly on a quarterly basis.
Consumer confidence in disposable income in particular falls by a major 7 points to
its lowest level since Q4 2013.
-20%
-10%
0%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Your job security
-20%
-10%
0%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Your level of debt
-20%
-10%
0%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Your general health and wellbeing
-10%
0%
10%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Your children’s education and welfare
-50%
-40%
-30%
-20%
-10%
0%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Your household disposable income
-20%
-10%
0%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Your job opportunities/career
progression
Q2 2017 Deloitte Consumer Tracker
4. 4
Individual measures of confidence (y-o-y)
Year-on-year confidence the picture is more mixed, with only 3 out of 6
measures falling. Sentiment about job opportunities and career progression, and
views on job security are both higher than they were a year ago, and this despite
a quarterly fall.
-11%
-15%
-13%
-2%
-36%
-12%
-7%
-8% -8%
0%
-29%
-10%
-4%
-5% -5%
2%
-18%
-3%
-4% -4%
-12%
1%
-15%
-5%
-10%
-1%
-11%
-4%
-14%
-7%
-6% -6%
-13%
-4%
-24%
-6%
-40%
-30%
-20%
-10%
0%
10%
Your job security Your level of debt Your general health
and wellbeing
Your children’s
education and welfare
Your household
disposable income
Your job
opportunities/career
progression
Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2017
Measures of confidence
Q2 2017 Deloitte Consumer Tracker
5. 5
Spending behaviours in the last three months (y-o-y)
While spending is up significantly in the essential categories driven by rising
inflation, consumers have reduced their spending in all the discretionary
categories compared to the same period a year ago.
-30%
-20%
-10%
0%
10%
20%
30%
40%
Goingout(e.g.cinema,
theatre,concerts,etc.)'
Furnitureandhomeware
Electricalequipment(e.g.
PCs/laptop,television,mobile
phonedevice,etc.)'
Clothingandfootwear
Alcoholicbeveragesand
tobacco
Restaurantsandhotels
(eatingoutandshortbreak)
Majorhouseholdappliances
(e.g.washingmachine,fridge,
cooker,vacuumcleaner,etc.)'
Holidays(longbreak)
Landline/mobilephone,
Internetandcable/TV
subscriptions'
Housing(e.g.rent,mortgage,
maintenance)'
Transport
Utilitybills(e.g.water,
electricity,gasandother
fuels)'
Groceryshoppingforfoodand
non-alcoholicbeverages
Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2017
Year on year spending behaviours
Q2 2017 Deloitte Consumer Tracker
6. 6
12%
13%
15%
10%
12%
15% 15%
10%
11%
15%
12%
9%
7%
9%
5% 5%
3%
5% 5% 5% 5%
12% 12%
8%
-16%
-15%
-16%
-12%
-11%
-7%
-12%
-11%
-10%
-5%
-8%
-6%
-5%
-2%
-8%
-5%
-6%
0%
-7%
-3%
-2%
0%
-4%
-7%
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Essentials Discretionary
Spending in the last three months
Spending on essentials and discretionary categories are both down this quarter –
a sign of the pressures consumer spending is coming under.
Quarterly spending on Essentials and Discretionary items
Q2 2017 Deloitte Consumer Tracker
7. 7
Expansionary vs Defensive behaviours
Expansionary behaviours are down for the second consecutive quarter and back
to levels last seen two and a half year’s ago (Q3 2014)
21%
22%
23%
24%
25%
26%
27%
28%
Defensive Expansionary
Quarterly Expansionary vs Defensive spending behaviours
Q2 2017 Deloitte Consumer Tracker
10. 10
Spending on discretionary goods categories in the last 3 months
Despite a slight respite in clothing this quarter compared to Q1 2017, other
discretionary categories have experienced a drop in spending.
-18%
-21%
-23%
-13% -13%
-7%
-17%
-12%
-3%
-13%
-6%
-4%
1%
-12%
-6%
-7%
0%
-11%
-2%
-3%
3%
-9%
-8%
-19%
-18%
-17%
-16%
-14%
-11%
-14% -14%
-12%
-10%
-11%
-6%
-7%
-10%
-9% -9%
-6%
-8% -8%
-5% -5%
-7%
-11%
-12%
-11%
-12%
-9%
-10%
-7%
-9% -9%
-5% -5% -5% -5%
-3%
-5%
-6%
-3%
-1%
-4%
-1%
-4%
-2%
-3%
-5%
-13%
-9%
-15%
-10%
-11%
-4%
-12%
-10%
-2%
-7% -7%
-5%
0%
-8%
-7%
-8%
2%
-6%
-4%
-3%
1%
-4%
-10%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Clothing and footwear
Furniture and homeware
Major household appliances (e.g. washing machine, fridge, cooker, vacuum cleaner, etc.)'
Electrical equipment (e.g. PCs/laptop, television, mobile phone device, etc.)'
Net Spending on discretionary goods over the last 3 months Total
Q2 2017 Deloitte Consumer Tracker
11. 11
Spending on discretionary leisure categories in the last 3 months
Spending on experiences such as eating out and cinema trips continued to fall
but spending on holidays rose a sign that consumers will not compromise on
going away.
-31%
-26% -26%
-23%
-24%
-17%
-24%
-20%
-15%
-18%
-15%
-16%
-9%
-15%
-14%
-13%
-4%
-13%
-10% -10%
-5%
-11%
-15%
-25%
-24%
-20%
-17%
-15%
-11%
-17%
-13%
-9%
-12%
-8%
-3%
-1%
-10%
-5%
-2%
-1%
-6%
-2%
1%
2%
-6%
-7%
-15%
-14%
-11%
-6%
-5%
-9%
-8%
-4%
-8%
-4%
-1%
4%
-4%
-3%
0%
2%
-4%
-2%
5% 5%
-1%
1%
4%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Going out (e.g. cinema, theatre, concerts, etc.)'
Restaurants and hotels (eating out and short break)
Holidays (long break)
Net Spending on discretionary leisure categories over the last 3 months Total
Q2 2017 Deloitte Consumer Tracker
12. 12
Spending on essential categories in the last 3 months
Spending on transport and utilities is down this quarter compared to the previous
quarter but remains higher than it was a year ago. Spending on groceries rose
this quarter.
21%
19%
23%
18%
23%
32%
26%
22%
30%
21% 21%
15%
25%
6%
8%
4%
20%
8%
12%
8%
30%
19%
22%
40% 40%
43%
27%
28%
44%
49%
31%
44%
33%
19%
14%
22%
17%
8%
5%
12% 12%
4% 4%
20%
31%
16%
21%
23%
29%
15%
20%
19%
20%
15% 15%
13%
12%
10%
-1%
2%
5%
4%
0%
1%
7%
9%
12%
13%
8%
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Grocery shopping for food and non-alcoholic beverages
Utility bills (e.g. water, electricity, gas and other fuels)'
Transport
Net Spending on essential categories over the last 3 months Total
Q2 2017 Deloitte Consumer Tracker
13. 13
Category spending in the last 3 months
Both retail and leisure spending suffered a drop in spending for the second
consecutive quarter.
-9.5% -9.2%
-9.7%
-7.3%
-6.5%
0.3%
-6.5%
-8.0%
-5.8%
1.2%
-4.3%
-2.5% -2.7%
4.2%
-6.8%
-5.0%
-6.0%
4.0%
-6.0%
-1.7%
-2.3%
5.2%
-2.2%
-3.2%
-23.7%
-21.3%
-19.0%
-15.3%
-14.7%
-12.3%
-16.3%
-13.0%
-12.3%
-10.7%
-11.3%
-8.0%
-5.0% -4.7%
-9.3% -9.5%
-4.3%
-3.0%
-7.0%
-2.3%
-1.3% -1.3%
-5.3%
-6.0%
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Retail spending Leisure spending
Quarterly category spending in the last three months
Q2 2017 Deloitte Consumer Tracker
14. 14
Spending in the last three months
The May retail sales volume decline was worse than expected and hit their
slowest level in four years. The fall in volume meant that retail sales in value
terms saw its weakest rise since April 2013.
-6
-4
-2
0
2
4
6
8
10
May2007
Aug2007
Nov2007
Feb2008
May2008
Aug2008
Nov2008
Feb2009
May2009
Aug2009
Nov2009
Feb2010
May2010
Aug2010
Nov2010
Feb2011
May2011
Aug2011
Nov2011
Feb2012
May2012
Aug2012
Nov2012
Feb2013
May2013
Aug2013
Nov2013
Feb2014
May2014
Aug2014
Nov2014
Feb2015
May2015
Aug2015
Nov2015
Feb2016
May2016
Aug2016
Nov2016
Feb2017
May2017
Volume Value
Q2 2017 Deloitte Consumer Tracker
Retail Sales TOTAL Volume and Value (excl. fuel) SA - annual % change
Source: Thomson Reuters / Office of National Statistics (ONS)
15. 15
Inflation
UK inflation rose to 2.9% in June, the highest since June 2013. We are starting
to see this impacting average in-store prices, which increased by 2.8%, the
largest growth since March 2012, and non-food saw the biggest price rise since
October 2011. This suggests that retailers are having to pass some of the cost
pressure from the rising price of imported goods on to consumers.
-1
0
1
2
3
4
5
6
01/05/2007
01/07/2007
01/09/2007
01/11/2007
01/01/2008
01/03/2008
01/05/2008
01/07/2008
01/09/2008
01/11/2008
01/01/2009
01/03/2009
01/05/2009
01/07/2009
01/09/2009
01/11/2009
01/01/2010
01/03/2010
01/05/2010
01/07/2010
01/09/2010
01/11/2010
01/01/2011
01/03/2011
01/05/2011
01/07/2011
01/09/2011
01/11/2011
01/01/2012
01/03/2012
01/05/2012
01/07/2012
01/09/2012
01/11/2012
01/01/2013
01/03/2013
01/05/2013
01/07/2013
01/09/2013
01/11/2013
01/01/2014
01/03/2014
01/05/2014
01/07/2014
01/09/2014
01/11/2014
01/01/2015
01/03/2015
01/05/2015
01/07/2015
01/09/2015
01/11/2015
01/01/2016
01/03/2016
01/05/2016
01/07/2016
01/09/2016
01/11/2016
01/01/2017
01/03/2017
01/05/2017
CPI Harmonised Inflation
UK CPI ANNUAL PERCENTAGE CHANGE - ALL ITEMS NADJ
Source: Thomson Reuters / Office of National Statistics (ONS) Q2 2017 Deloitte Consumer Tracker
16. 16
Average earnings v. Inflation
In addition, real wage growth is now in negative territory, which has started to
dampen consumer confidence.
% Growth in average wages vs. CPI Inflation
Source: Thomson Reuters / Office of National Statistics (ONS)
Q2 2017 Deloitte Consumer Tracker
17. 17
Unemployment
The unemployment rate at 4.6% is the lowest since 1975.
Source: Thomson Reuters / Office of National Statistics (ONS)
UK LFS: Unemployment rate, all, aged 16 & over seasonally adjusted
Q2 2017 Deloitte Consumer Tracker
18. 18
Savings ratio
Yet strong consumer spending has been at the cost of savings
Source: Thomson Reuters / Office of National Statistics (ONS)
Savings ratios
Q2 2017 Deloitte Consumer Tracker
19. 19
Household lending
After years of people paying off debts post-downturn, unsecured borrowing has
steadily increased since 2014 reaching record highs.
Source: Thomson Reuters / Office of National Statistics (ONS)
Secured and Unsecured lending to household
Q2 2017 Deloitte Consumer Tracker
20. 20
Consumer spending – Next three months
As consumers claim they will continue to reduce their spending into the next
quarter, this is shaping up to be a difficult second half of the year for retailers
and the consumer economy as a whole.
8%
3%
9%
1%
7% 7% 7%
3%
6% 6% 6%
4%
5%
0%
1% 1%
2%
-1%
0%
2%
3%
5%
7%
3%
-19% -19%
-14%
-16%
-13%
-19%
-14% -14%
-12%
-17%
-8% -8%
-9%
-16%
-9% -9% -9%
-14%
-8%
-7% -7%
-13%
-4%
-8%
-20%
-17%
-14%
-15% -15%
-16%
-14%
-13%
-14%
-12%
-8% -8%
-10%
-9%
-6%
-7%
-10%
-7%
-8%
-6%
-8% -8%
-5%
-7%
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Essentials Small-ticket items Big-ticket items
Consumer spending over the next three months
Q2 2017 Deloitte Consumer Tracker