UK consumer confidence continues to recover, with e-commerce traffic and sales rising in April
UK consumer confidence recovers, e-commerce traffic and sales rise in April
According to research institution GfK’s data released on May 19th, the UK consumer confidence index rose by 3% in May to -27. This is the fourth consecutive month that UK consumer confidence has risen, with this index hitting a historic low of -45 in January this year.
GfK pointed out that the UK consumer confidence index in May was the highest level since the outbreak of the Russia-Ukraine conflict and the surge in energy prices in 2022. In addition, Britons’ expectations for the overall economy and personal finances rose significantly by 4% and 5% respectively from the previous month, and the index measuring whether consumers believe it is a good time to make large purchases also rose by 4%.
According to Bloomberg, economists believe that the outlook for the UK economy in the next 12 months is improving and that inflation may drop at the fastest rate in over 30 years as energy prices continue to fall from their high levels. Last week, the Bank of England raised its economic outlook and said it no longer expects a recession.
However, consumer spending remains subdued. In the first quarter of this year, consumer spending was still over 2% lower than in the last quarter of 2019. According to the latest Adobe Digital Economy Index (DEI) data for the UK, online consumer spending totaled £32.6 billion in the first four months of this year, of which 15% was paid through BNPL (Buy Now Pay Later).
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The prices of essential items continue to rise online. In April, the prices of groceries rose by 0.68% month-on-month and 9.2% year-on-year, while pet product prices rose by 0.84% month-on-month and 12.3% year-on-year. In contrast, the prices of non-essential items such as electronics and clothing fell mainly due to weak demand.
However, the latest data shows that e-commerce sales and traffic have both increased since April, with e-commerce sales revenue increasing by 57.3% year-on-year, driven by Easter and the coronation ceremony of the king.
In addition, the trend of mobile shopping in the UK continues to grow. In April, UK consumer spending on mobile devices reached £4.9 billion, an increase of 8.6% year-on-year, accounting for 61% of total online sales that month.
Wunderkind data shows that online sales during the Easter period in April increased by 27.6% year-on-year, while website traffic for shopping increased by 46.8% year-on-year. In March, website traffic for UK shopping increased by 60%, indicating that UK consumers’ purchasing consideration phase seems to be shortening.
Data from the Retail Research Center shows that the coronation of the king of the UK brought £1.4 billion in consumption to the retail industry. Wunderkind’s data shows that in the week before the coronation (including May 1st to 7th), UK e-commerce sales revenue increased by 28.9% year-on-year, while website conversion rates increased by 78.2% year-on-year and website traffic also increased by 64.6%.
However, during the coronation period (May 6th to 8th), online consumption decreased by 20.4% year-on-year, equivalent to £114 million. According to historical data from Adobe, long weekends tend to cause a decrease in online consumption compared to normal weekends, and the additional coronation long weekend is expected to further drag down online consumption this year.
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