Yahoo Finance Inflation to cost UK shoppers an extra £18.2bn on non-food retail this year
UK retail sales that do not include food are set to hit £243bn this year but the 2.6% isn’t coming from more shopping – it's purely inflation.
Inflation is set to add £18.2bn to UK non-food retail sales in 2023, according to Retail Economics.
About 80% of retailers were planning to increase the price of products, with 40% suggesting rising costs will be the biggest challenge in 2023, the survey found.
As prices increase amid a cost of living crisis, consumers try to find ways to cut costs. About 74% of UK consumers plan to change their buying behaviours, with 34% stating they would only make purchases when necessary and 29% intending to delay or reduce spending, figures show.
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Richard Lim, CEO of Retail Economic, said: “Retailers will continue to face a toxic mix of pressures this year as rising input and operating costs collide against a backdrop of weaker consumer demand, rising interest rates and shifting consumer behaviours.
“These conditions favour those retailers who have strong balance sheets who can invest heavily in price, leverage data to target their most valued customers and win new ones, while efficiently utilising stores to provide a truly omnichannel proposition.”
As a result of consumers’ reported plans to cut back, UK retail sales volumes, as in units of products sold, are set to fall 4.9% in 2023 compared to last year.
Andrew Norman, general manager at Metapack, said: “Keeping costs down will be the top priority for both retailers and consumers in 2023.
“As our research highlights, everybody will be looking to get the most bang for their buck from operating costs to delivery costs and product costs.
"From offering a greater choice of delivery options, having a resilient carrier infrastructure, to providing delightful deliveries experiences, we believe retailers who are able to provide the most value will be the ones who come out on top.”
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The research reveals furniture and homewares will be most impacted with 43% of UK consumers set to delay or reduce spending on these products.
Over a third (35%) plan to look to switch to cheaper brands when it comes to buying clothes, with 32% stating they would look for cheaper alternatives when it comes to electrical items.
One in three UK consumers plan to carry on spending as normal on health and beauty products – more than any other sector – with an additional 14% preferring to trade down rather than purchase less often.
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