Cost of living challenge for retailers
January 11, 2022
The British Retail Consortium has warned of challenging times ahead for stores as the well-publicised rise in the cost of living starts to bite into consumers' purchasing decisions.
“Retailers did well to weather the challenging trade conditions, with retail sales for 2021 up on both the previous year and compared to pre-pandemic levels," said Helen Dickenson, chief executive of the BRC.
Despite Omicrom, retail sales in the UK grew by just over 2% in December but the furnishing sector was a star performer - data from Barclaycard showed 22.4% growth year-on-year.
But Ms Dickenson said: "Retail faces significant headwinds in 2022, as consumer spending is held back by rising inflation, increasing energy bills, and April's National Insurance hike. It will take continued agility and resilience if they are to battle the storm ahead, while also tackling issues from labour shortages to rising transport and logistics costs.”
Barclaycard said 43% of 2,000 people surveyed on behalf of the credit card provider expected high inflation to affect their household budgeting. “The wider economic picture is encouraging consumers to be more cautious with their discretionary spending,” it said.
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