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Consumers start to feel the "pinch"

Posted by: Laura Morroll

The great British summer coming early (momentarily) provided a welcome boost to retailers in April. However, the May BRC figures paint a different picture with a 0.4% decrease on like-for-like sales.

Helen Dickinson OBE, Chief Executive, British Retail Consortium said: 

After the pick-up in sales over Easter, consumer spending slowed again in May resulting in almost flat growth on the previous year. 

Overall, May’s sales slowdown is indicative of a longer term trend of a decline in consumer spending power. As household budgets become increasingly squeezed by inflation, predominantly in the non-retail part of the consumer basket, it’s vital that the next Government helps retailers keep prices low for ordinary shoppers.

In light of the pressure on retail prices, retailers can’t sit still and need to look at both efficiency and strategic levers within their control to manage their cost base so that margins don’t get squeezed. Efficiency levers improve the flow of information leading to accurate planning, efficient use of resources and minimise non-value added tasks. Similarly, strategic choice levers relate to a retailer’s proposition strategy and how they choose to compete or differentiate themselves in the market. 

Read our recent insight about understanding and managing your Cost-to Serve® here.

Laura Morroll is an MBA graduate with a passion for retailLaura began her career in retail operations with Decathlon and Nike, then into Buying and Merchandising with Nike, The Works and Claire’s accessories. In consulting Laura has led a number of end-to-end sourcing, speed to market, buying and merchandising process optimisation, DC, and network projects.


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