The news: As war in Ukraine persists, consumer concerns over inflation grow across Europe and the UK. Consumer confidence is at an all-time low, and will take a while for retailers to rebuild in European markets.
More on this: For the past two years, consumers’ shopping behaviors have been characterized by pandemic-related concerns. While confidence had started to increase as concerns over the pandemic declined, Russia’s recent war on Ukraine combined with inflation has reversed that gain.
- Consumer sentiment dropped significantly in the past month, failing to stabilize after an observed low due to pandemic-related stressors, per GfK.
- Similar drops in consumer sentiment were last observed during the 1993 recession and the start of the pandemic, showcasing consumers' concerns over access to everyday essentials as a result of Russia’s war on Ukraine.
On the Continent, by country: France, Germany, Italy, and Belgium have experienced massive plummets in consumer confidence as inflation rises. A quarter of German consumers rearranged investment plans in response to economic shifts resulting from the war in Ukraine.
Meanwhile, in the UK: Consumer confidence entered its fourth month of decline, as living costs rise and fuel and food prices reach record levels. Grocery inflation hit its highest level in 10 years, according to Kantar, causing consumers to alter shopping habits.