Retailers now seeing real impact of cost of living crisis

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With retail sales volumes falling 0.3% in the three months to April, we’re now starting to see the real impact the cost-of-living crisis is having on individuals and the economy. Sales may have increased by 1.4% in April, but shoppers actually ended up with 4.9% less stuff compared to a year ago, showing the stark impact of inflation.

With inflation now at a 40-year high, spiralling energy prices, global supply chain issues and the impact of the Ukraine war, this is the most uncertain time retail has faced in a generation.

Warmer months and the summer holiday season, especially the Jubilee Bank Holiday weekend, will help to offset some of the downturn. But a squeeze on disposable income will continue to affect retailers and especially the high street, for months to come.

To navigate these changing economic headwinds, delivering an effortless experience will be vital. Customer loyalty will be hard to come by as consumers jump between retailers to seek out value, service, and price. Therefore, intelligent use of data to create more personalised experiences and communications will be key to this, as well as digitising supply chains to help bolster consumers’ purchase decisions.