Bullish Gen Z bucks consumer confidence trend
Gen Z’s plans to go big on spending in the next three months have contributed to a rise in consumer confidence, a new survey has suggested.
Barclays last year predicted in November that people born between 1996 and 2010 would account for around 39 per cent of retail spending by 2030.
Now a new survey by the British Retail Consortium (BRC) suggests Gen Z’s plans to splash out on goods may provide a much-needed boost to the retail sector in the short term.
Ambitious spending plans by teenagers and young adults were the driving factor behind a rise in consumer confidence.
Gen Z‘s contributions have been partly offset by their parents, BRC data suggested, as adults aged 44-59 planned to make big spending cuts for most items.
Retailers have previously warned that they will raise prices as a result of higher wage bills and a national insurance contributions (NICs) tax hike.
Forecasters have predicted that inflation will remain well above the Bank of England’s two per cent target over the course of this year.
BRC chief executive Helen Dickinson said a £5bn increase would force businesses to push up prices further.
“Food inflation is likely to hit 5% by the end of the year, and with further costs from the new packaging tax and implementation of the Employment Rights Bill, prices risk being pushed up further,” she said.
The overall picture for consumer confidence in the UK economy remains bleak.
Consumer confidence in the state of the economy inched up while people’s anxieties about their personal finances barely changed, the BRC’s research showed.
Dickinson urged Reeves to make more business-friendly policy announcements at her Spring Statement next week.
“Without a much needed confidence boost from the government, the scale of new costs will see retail investment fall further, holding back future growth in the economy.”