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U.K. retailers facing more strain since pandemic onset amidst inflation

U.K. retailers facing more strain since pandemic onset amidst inflation
U.K. retailers facing more strain since pandemic onset amidst inflation

British shoppers have reportedly slashed their purchases for the third consecutive month in a row, and sales volumes have now tumbled to a great extent ever since the COVID-19 pandemic clobbered the markets.

According to the British Retail Consortium (BRC), the overall revenue at most big establishments and supermarket chains was recorded to be 1% lesser in June than it was a year ago, compared to a 1.1% drop in May.

Nevertheless, the statistics have not been pegged to inflation, with the BRC claiming that buyers were fielding offers from budget brands of food and other necessities, as well as deferring purchases of kitchen equipment and other household products.

As inflation moves to sting and households cut back on buying, sales volumes are dropping at a rate not seen since the profundities of the pandemic. Besides, the soaring living expenses in the U.K. have compelled most of the candidates vying to succeed Boris Johnson as Prime Minister to promise tax reductions.

The BRC's measure of inflation among its members including big retail shops reached 3.1% in June, setting a record since 2008, while the consumer prices index which encompasses a broader array of goods observed a 40-year high of 9.1% in May.

On the contrary, food costs were temporarily boosted by a prolonged public holiday in early June to commemorate Queen Elizabeth's 70-year-dynasty, while apparel sales also profited from a seasonal upsurge. Even consumer spending in June was recorded at 6.2% higher than a year ago, driven by a nearly 40 percent increase in utility spending.

It is worth noting that the movie theaters were one place where British people did spend a fortune. Films like "Jurassic World Dominion" and "Top Gun: Maverick" elevated revenues by 5.3% month-over-month, while expenditure on streaming platforms fell by 4.2% in May.

While the Bank of England has offered to act vigorously on inflation, it is expected to also assess the extent to which the economic system is already shrinking to prepare for a potential recession.

Source Credits:

https://retail.economictimes.indiatimes.com/news/industry/uk-retailers-see-biggest-squeeze-since-pandemic-as-inflation-bites-brc/92815534#:~:text=The%20British%20Retail%20Consortium%20said,a%201.1%25%20fall%20in%20May.

About the author

Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.