CONSUMER sentiment remained resilient in 2016, with shoppers in the south feeling more positive than those in the north, according to the latest survey from professional services firm PwC.
PwC’s consumer sentiment survey said that economists now expect the UK to have a “soft landing” following the vote in favour of Brexit, but inflation is still set to have an impact on consumers.
Christmas across the UK was better than expected for the retail sector with like-for-like sales up 0.9 per cent on 2015.
The Christmas winners were the retailers who gave consumers what they wanted, although there were regional variations in consumer sentiment, PwC said.
The gloomiest shoppers are in Yorkshire and the Humber, where only 15 per cent of consumers expect to be better off in the next 12 months, the survey found.
By contrast, London’s shoppers are the most cheerful in the country. Thirty three per cent of the survey’s respondents in London believe they will be better off in the next year.
Many of the respondents who were feeling better off said this was due to a pay increase or an improvement in their personal prospects.
Despite the strong Christmas trading, there are clouds on the horizon for UK retailers, because they will have to contend with factors such as inflation, PwC said.
The report said that retailers need to provide a seamless multi-channel experience. Some consumers shopping online at Christmas complained about encountering a slow website or app, while others grumbled about payment problems.
PwC is urging retailers to invest in technology, such as checkout free stores and drone delivery, because tomorrow’s competitors may not be conventional retailers, with corporates giants such as Amazon potentially stealing their market share.
A PwC spokesman said: “Retailers need to stay nimble and look for new ways to get ahead in 2017, as rising costs, an uncertain consumer outlook for spending, and the pace of innovation continues to accelerate.”
Madeleine Thomson, a partner at PwC and UK leader of retail & consumer, said: “Earning and keeping customer trust is key in a highly competitive retail world and tough economic climate.”
Dan Stott, a PwC partner and Yorkshire and North East lead for retail & consumer, added: “The highest performing bricks and mortar and online retail businesses are now using their data wisely, giving them an advantage in understanding what their customers want, (and) how they want it.”
Mr Stott said the top retailers knew how to create a supply chain and sales environment to give them the edge.
PwC director Tom Woodham also saw opportunities for retailers to improve the effectiveness of their logistics operations, which included being more flexible and using partners to deliver greater innovation.
PwC surveyed a nationally representative sample of 2,009 consumers across England, Wales and Scotland in late December 2016. PwC has been measuring consumer sentiment every three to four months since 2008.