22. Weekly Newsletter
UK Consumer Trends
Britain’s second-largest supermarket, Sainsbury’s, has released it’s data on UK consumer spending insights. The data showed that optimism around the UK economy has risen sharply to a peak of 49% of the public believing that the general economic situation will “get better” in the next six months. As expected, this coincides with the perception of the economic situation getting “worse” being stated by just 29% of shoppers- by far the lowest level over the last two years. Additionally, the public confidence in their own personal finances getting “better” has almost doubled (to 23%) since the start of the year and the “get worse” option now also sits at a record low of 17%.
Compiled data from Sainsbury’s report also suggests that the average shopper’s basket size has now almost returned to pre-COVID levels. Plus, online shopping continues to grow its market share (£1.3bn online vs £8bn in-store during the first four weeks of April) although this is now slowing with lockdown restrictions easing. Finally, more people are making ‘travel plans’ as certainty over the summer holidays increases despite the recent increases in the Indian variant of COVID across the UK. Interestingly, 51% of the public have already decided to specifically “stay within the UK” for their summer holidays; whereas, just 13% “intend to fly to Europe” for over the holiday season.
Almost 4.5m people in the UK have tested positive for COVID but the daily rise in cases has remained consistently low for most of the year- however, some are claiming the third wave is now beginning. A total of around 127,800 deaths have been attributed to the virus and the daily increase sits in the single digits. Nationally, 39.5m people have received their first vaccine and approximately 25.5m of these patients have also received their second dose. This brings the total number of inoculations carried out, by the private sector and National Health Service, to around 65 million.
Recent increases in daily COVID cases have sparked suggestions that the end to the English lockdown should be delayed from the 21st of June. Downing Street has confirmed that it is still too early to speculate on whether lockdown should be lifted. The main cause of this concern originates from the ‘Indian variant’ which has now become the nation’s dominant strain: making up three quarters of all cases.
The OECD, this week, upgraded it’s forecast for UK GDP growth in 2021 to 7.2% which would represent the fastest rate since 1941. However, this would also depict the nation as suffering from more ‘longer-term economic damage’ than any other of the G7 countries. Saudi Arabia, Mexico, Brazil and India are some of the economies which have been categorised as more greatly impacted by the pandemic than the UK. The think-tank also raised it’s forecast for the global recovery to 5.8%- an increase from the prediction made six months ago of 4.2% growth.
OECD data shows that the UK recovery to pre-pandemic GDP per capita levels will be reached in Q2 of 2022 (Sweden Q4 2021); the disproportionately impacted sector of the UK economy has been the ‘export of goods’ which plunged 27.6% (Sweden’s increased in the same period 3.5%) between Q4 of 2019 to Q4 of 2020. Both COVID and Brexit challenges have been attributed to these results which saw the economy dive 9.8% for 2020 but, following an expected 7.2% increase this year, could go on to achieve a 5.5% growth figure in 2022.