Before this year, lower morale on the high street had only been recorded twice in the history of the GfK NOP consumer confidence index – during the recessions of the early 1990s and 2008.
The index dropped to -30 in July, from -25 in June, with all the sub-indices getting worse.
“The biggest drop of nine points was in people’s expectations of the performance of the economy over the next 12 months,” said Nick Moon of GfK NOP Social Research.
“When combined with people’s pessimistic expectations for their own finances over the next year, retailers can expect tough conditions to persist for a while yet – threatening an already fragile recovery.”
Retail sales this month were even lower than at the same point last year according to a Confederation of British Industry (CBI) survey published yesterday.
Almost four in 10 (38 per cent) of retailers reported that sales were down on a year ago; only a third said that sales were up, resulting in a negative balance of minus five per cent.
The underlying measure of sales, a three-month average, remained in positive territory (at plus four per cent) but this was still its weakest print since July last year.
At the beginning of the year, the index was at +45 per cent, yet has plummeted since. A negative balance of -33 per cent of shopkeepers said that sales poor for the time of year. “Rising prices, especially for fuel, continue to impact consumer confidence and make life tough on the high street,” said Judith McKenna, chair of the CBI Distributive Trades Panel.