Consumer confidence has fallen for the second quarter in a row as grocery bills continue to rise, according to the latest research from Deloitte.
The Deloitte Consumer Tracker revealed that rising utility and grocery bills had increased personal spending for 41% of consumers in the last quarter of 2021, up from 36% in the three months previous.
As a result, consumer confidence fell for the second consecutive quarter as consumers started to feel the pressure of soaring inflation rates.
“With the expected squeeze on spending power and higher inflation, another fall in confidence may dent the hopes of a consumer recovery,” stated Deloitte’s consumer insights lead, Céline Fenech.
“The further easing of restrictions should also support an improvement in sentiment, in turn boosting spending. However, this may not occur until inflation has peaked so the critical question in the meantime is whether consumers can afford to continue spending.”
The news comes shortly after the Office for National Statistics (ONS) revealed food inflation rates had reached 5.4%, the highest in over 30 years. Meanwhile, the price of commodities and goods continue to be impacted by pandemic-related shifts in demand and supply and post-Brexit supply chain issues.
Deloitte chief economist Ian Stewart added: “Sharply higher inflation and a squeeze on consumer spending power has hit consumer confidence.
“With inflation set to rise further a tough few months are in prospect.”