As the cost-of-living crisis continues, the British Retail Consortium has warned there may be “more gloom than glitter” this Christmas. With families preoccupied with making ends meet, what can retailers expect from the festive trading period? This Analyst Take will explore how shopping habits might change, what will happen to total spend this holiday season, and how retailers can maintain loyalty and attract new customers amid inflation.
The cost-of-living crisis continues to worsen in the UK. Consumer price inflation rose to 9.6% in October 2022, while food price inflation reached 16.2%—its highest level in 45 years, per the Office for National Statistics.
Household bills are also surging, and the Bank of England announced a 3% increase in interest rates, which will affect the cost of borrowing, including mortgage rates. As a result, people are feeling the pinch: Almost half of UK consumers (48.8%) say they feel worse off financially than last year, per a 2022 VoucherCodes study.