Deloitte Consumer Tracker: consumer confidence heats up

• Consumer confidence continues to improve and is now four points higher than a year ago;
• Net spending on holidays on the verge of positive, rising to -1% in Q2 2014 from -4% this time last year;
• Net spending on short breaks and eating out rose five points from -13% (Q2 2013) to -8% (Q2 2014);
• Consumers intending to spend more on holidays to outnumber those planning to cut back in Q3.

UK consumer confidence in Q2 2014 was four points higher than the same period a year ago (from -10 in Q2 2013 to -6 in Q2 2014), according to the latest Deloitte Consumer Tracker. Sentiment about disposable income was up 11 points (from -29 in Q2 2013 to -18 in Q2 2014).

The Tracker also shows more consumers started a job (from 8% in Q2 2013 to 11% in Q2 2014) and fewer reported a loss or reduction of income (from 14% in Q2 2013 to 12% in Q2 2014).

In terms of holidays, net spending year-on-year has risen by a further three points in Q2 2014 to -1%, from -4% in Q2 2013.  Similarly, net spending on short breaks and eating out rose five points from -13% (Q2 2013) to -8% (Q2 2014).

Looking forward to the next three months, consumers plan to spend more on holidays with the net spending expected to rise to +1% from -6% for the same period last year.  Consumers also anticipate their net spending on short breaks and eating out to rise over the next quarter to -8%, up from -16% compared to same time last year.

Graham Pickett, head of travel, hospitality and leisure at Deloitte, said: “Low inflation, or in some cases deflation, means that consumers should be getting better value for their money. Combined with the rising confidence in household disposable income, consumers are edging away from the defensive spending habits they adopted during the recessionary years and spending more on the things they enjoy.  Since we started the Tracker in 2011, holidays have consistently been one of the big ticket expenses consumers have been reluctant to cut back on. Many people view their annual holiday as a necessity and we are on the verge of consumers actively spending more on their holidays.

“However, whilst consumers have every intention in taking their holiday, we are noting concerns from the aviation and travel industry about softening prices, particularly this summer, caused largely by over capacity issues and a very much lower than expected number of booking in the second quarter of the year. It appears consumers are delaying their booking decision with the expectation of picking up a late summer holiday bargain.”

Notes to editors

About The Deloitte Consumer Tracker
The Deloitte Consumer Tracker is an economic update focussed on consumer spending attitudes and behaviours. Through a quarterly survey of 3,000 adult UK consumers it monitors the patterns of consumer expenditure on a category-by-category basis and the underlying  drivers of spending behaviour, notably household disposable income and consumer confidence. It also considers consumers’ spending outlook  for the next quarter.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

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