A third of shoppers believe prices will rise “rapidly” in the next year as fears that a weaker pound will push up import prices in the wake of the Brexit vote hits consumer optimism, according to GfK.
Its headline index dropped to -9 in July, from -1 in June. This is well below the 12-month average of zero, and represents the biggest drop in confidence since December 1994.
The Telegraph reports that all the main measures of GfK’s survey fell in April, including views on the economic outloook, personal finances and willingness to spend on big-ticket items such as fridges and TVs.
Joe Staton, head of market dynamics at GfK, said: “Our analysis suggests that in the immediate aftermath of the referendum, sectors such as travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending.”
It came as a separate survey showed high street sales fell by 3.6pc in June compared with the same period last year, making it the worst June in more than 10 years.
BDO said a “strong start” to the month more than reversed by the end of June, as sales plummeted by 8.1pc in the final week.
The boss of Sports Direct suggested a deeper slowdown could be looming. Dave Forsey said trading had seen an “immediate” hit on the first day of the Brexit result.
“Consumer confidence in general has taken a hit but the unknown is for how long will this continue,” he said. “It’s a question of seeing how this develops but after June 23 it has been tougher and the uncertainty is what people don’t like”.