Consumer confidence levels are key to a profitable retail sector. When shoppers are optimistic, they tend to loosen their purse strings and spend more money at retail. Conversely, when the economy goes south and they aren't as confident, they frequently scale back spending.

Several retailers based out of the United Kingdom recently commented on the status of consumer confidence in the U.K. They all agree that consumer optimism is low and will continue to remain that way. In order to stay on top, retailers will need to develop new ways of bringing in customers – and that means more than simply offering discounts.

"We always knew this was going to be a bumpy road of slow growth," Mark Price, managing director of Waitrose, told Retail Week. "Retailers need to focus on delivering good value, not just low prices.

"The biggest danger is consumer perception," Theo Paphitis, owner of Boux Avenue, added. "The worry is it will impact consumer confidence which is really borne out of unemployment levels."

Conversely, consumers elsewhere in the world are growing more optimistic. For example, American consumer confidence recently hit a four-year high.

This entry was posted by Retail Pro on Tuesday, May 1st, 2012 at 2:05 am .