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Happy new year deferred, says BRC
January 3, 2023
A happy new year for retailers may have to wait until the second half of 2023, says the British Retail Consortium.
Shops across the country are facing a particularly difficult six months ahead as customers try to cope with higher prices by buying less. Sales will only rise by 2.3% at most in the first half of the year, the British Retail Consortium (BRC) predicts.
"The first half of the year is likely to be challenging for households and retailers," said Kris Hamer, director of insight, at the BRC.
"Ongoing inflation will make sales appear to be rising, but we expect falling volumes as consumers continue to manage their spending," he said.
During 2022 many customers reined in their spending as prices rose sharply, pushed up by the war in Ukraine, higher energy prices, and the knock-on effect of the pandemic.
This Christmas was the first with no Covid restrictions since 2019, and shoppers did return to High Streets in bigger numbers. However, footfall remained below pre-pandemic levels, hampered in part by rail strikes and severe weather.
"From a retailer's point of view there's been a perfect storm of pressures," said retail analyst Richard Lim.
However, the BRC's modelling suggests the outlook is better for the latter part of the year. "There is cause for optimism in the second half of 2023, when we expect inflation to ease and improving consumer confidence," Mr Hamer said. The BRC said sales could grow by as much as 4.7% in the second half of the year.
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