Consumer confidence have finished a rollercoaster year by rising slightly in December as shoppers look to grab goods before the inflationary storm hits next year.
GfK’s long-running consumer confidence index has increased by one point this month to -7 after plunging heavily in the months following Brexit.
Two of the five measures analysed by GfK saw increases in December, with the remaining three measures decreasing.
“The past 12 months were a really turbulent year for confidence in the UK as consumers reacted to the dramatic economic and political turmoil of 2016,” said Joe Staton, head of market dynamics at GfK.
“After a positive start to the year, the index plunged rapidly in post-Brexit Britain with the recovery to September then evaporating by year end to limp home at -7 for December.
“While consumers remain relatively confident about their personal financial situation, confidence in the general economic situation for the UK has collapsed in the face of uncertainty about the future both at home and abroad.”
The major purchase index shot up seven points to +12 in December, fueling the one-point rise in the main index, as consumers looked to buy now before prices rise in 2017.
“Despite everything, consumer resilience is shown by strength in the major purchase index, the ‘now is a good time to buy’ mantra being reflected in strong retail sales growth,” Staton added.
“Looking ahead to 2017, against a backdrop of Brexit negotiations, the decline in the value of sterling, and the prospect of higher inflation impacting purchasing power, we forecast that confidence will be tested by the storm and stress (Sturm und Drang) of the year to come.”
In an exclusive column for The Grocer, Akeel Sachak - Rothschild global head of consumer - casts an eye over M&A activity in the food and drink sector and finds 2016 was a ‘vintage’ year. Read the column here on thegrocer.co.uk/finance.
Elsewhere, The Grocer has exclusive news that sugar-free ice cream brand Oppo has raised more than £200,000 in a third crowdfunding round to continue its rapid growth and help the start-up turn a profit for the first time. Read the story here.
The Grocer also carries news that annual sales fell at UK food and drink firm Princes as the widespread supermarket price deflation hit revenues, but lower input costs helped profits to grow. The company, best known for its range of canned fish and pies, saw sakes drop 3.6% to £1.49bn in the year to 31 March 2016 from £1.54bn in the previous period. Read the story here.
The Coca-Cola Company has also announced it has struck a deal to acquire the 54.5% stake in Coca-Cola Beverages African from AB InBev. Read it here.
And cheesemaker Wyke Farms shrugged off the difficulties faced by the dairy sector to post strong financial results for the year to 31 March. The Somerset-based dairy company bounced back from pre-tax losses of more than £1.1m last year to post a £3.9m increase to £2.8m, according to accounts filed with Companies House. Full story here.
Yesterday in the City
As market news in the grocery and fmcg world drops off before Christmas there is little to say in terms of drivers of share price.
Hotel Chocolat (HOTC), which is one of the retail winners of 2016, with the stock up 40% since the IPO, fell a whopping 7.9% to 265.3p as investors cashed in on December gains.
The FTSE 100 slipped 0.04%, as a bad day for Italian bank Monte dei Paschi hit Europen markets, but kept its head above 7,000 points