With inflation predicted to peak at 7% this month by the Bank of England, and with the cost of living crisis dominating the headlines, it’s perhaps not surprising that consumer confidence has taken a big hit.
According to PWC’s 2022 Spring Consumer Sentiment Survey, we are currently witnessing the biggest one-year decline in confidence since the global financial crisis. That’s compared to Spring 2021, when the same report revealed the highest levels of consumer confidence since the survey began in 2008!
At face value, you would assume alarm bells should be ringing at every retail facing business, but while the broader retail sector could well be facing a difficult period, the data indicates that it’s not all doom and gloom for home improvements, especially at the higher end of the market.
Put simply, inflation is creating a divergence across different demographics. According to Which? magazine, rising inflation will mean for those in the lowest 20% of incomes (households with an average income of £14,600 a year), £3 in every £10 will be spent on food and fuel.
For the 20% with the highest household incomes (an average of £81,000) it’s just £1.60 in every £10.
This is reflected in the PWC report, which reveals that while there has been a significant drop-off in confidence in all levels of affluence, it remains stable for the ‘professional’ classes, a group with the most lockdown savings and financial resilience to cost of living pressures.
Fabricators and installers who have positioned themselves to take advantage of high end, premium home improvement solutions will therefore be much better placed ahead of any prolonged uncertainty for the year ahead.