Easter week will "mark a turning point" for retailers as consumers are starting to feel more confident, according to a new economic analysis.
Despite fresh reports from major non-food retailers like JD Sports, B&Q owner Kingfisher and Asos suggesting the market remains highly challenging, the spending in the key Easter week is set to rise 5.7% on last year, according to Cebr (the Centre for Economics and Business Research).
Spending in the coming week is set to eclipse £11.4 billion, Cebr forecasts, a notable improvement on a year ago despite the unseasonable weather including snow and sleet in many parts of the country.
The forecast equates to £400 being spent per household in Britain.
"Easter weekend typically stands out as a highlight for retailers, as shoppers are enticed to venture out and make the most of the long bank holiday weekend," Cebr economist Cameron Misson said, noting that apparent consumer confidence about opening their wallets once again could see Easter week usher in "a resurgence in spending".
After the Christmas period saw a 3.5% decline in seasonally adjusted retail spending month-on-month in December, Cebr said items on retailers’ shelves prompted a significant discount-fuelled rebound in January, which saw the largest month-on-month rise since early 2021 of 3.6%.
An early Easter this year comes as consumer optimism is at its highest level for the past two years, as measured by the YouGov/Cebr consumer confidence index, as well as the Asda income tracker developed by Cebr showing spending power at its highest level for almost two years.
"Traditionally the Easter weekend fires the starting gun for consumer activity in a range of areas, and we estimate that this will be especially so in 2024 for several reasons," Cebr said, also citing the recent slowdown in inflation, solid real wage growth, and recent policy changes such as the government's National Insurance contribution rate cut.
Coupled with the decline in the energy price cap Ofgem and other factors expected to further bolster household spending power in the coming months (perhaps also including the prospect of a change of government), the economic consultancy said the combined factors "suggest that Easter week could mark a turning point for UK consumer prospects".
However, weather conditions may impact spending and the housing market.
"Easter weekend is an important milestone for the housing market as the four-day break encourages people to head out and view houses rather than staying indoors. This year, the forecasted rain might dampen such activity," Cebr said.
The economists noted that even those who are discouraged from moving home may contribute to spending this weekend with home improvements the classic alternative to home moves, contributing to DIY consumer spending during Easter week.