Consumer confidence is on the increase

The Tracker also shows that more consumers have started a job (from eight per cent in Q2 2013 to 11 per cent in Q2 2014) and fewer reported a loss or reduction of income.

In terms of holidays, net spending year-on-year has risen by a further three points in Q2 2014 to -one per cent, from -four per cent in Q2 2013. Similarly, net spending on short breaks and eating out rose five points from -13 per cent (Q2 2013) to -eight per cent (Q2 2014).

Looking forward to the next three months, consumers plan to spend more on holidays with the net spending expected to rise to +one per cent from -six per cent for the same period last year. Consumers also anticipate their net spending on short breaks and eating out to rise over the next quarter to -eight per cent, up from -16 per cent compared to same time last year.

Graham Pickett, head of travel, hospitality and leisure at Deloitte, said: “Low inflation, or in some cases deflation, means that consumers should be getting better value for their money. Combined with the rising confidence in household disposable income, consumers are edging away from the defensive spending habits they adopted during the recessionary years and spending more on the things they enjoy. 

“Since we started the Tracker in 2011, holidays have consistently been one of the big ticket expenses consumers have been reluctant to cut back on. Many people view their annual holiday as a necessity and we are on the verge of consumers actively spending more on their holidays.

“However, whilst consumers have every intention in taking their holiday, we are noting concerns from the aviation and travel industry about softening prices, particularly this summer, caused largely by over capacity issues and a very much lower than expected number of booking in the second quarter of the year. It appears consumers are delaying their booking decision with the expectation of picking up a late summer holiday bargain.”

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