According to a report by the British Retail Consortium, retail sales are predicted to expand in the range of 2.3% to 3.5% in the year 2023.
During the past 12 months, the growth in retail sales has been very minimal and it has been lower than the present rate of inflation, implying that the number of sales has decreased from the previous year. The trend is predicted to continue in the next year. The model predicts that the sales of food products will expand at a higher rate when compared to other sectors.
Analysts predict that sales will become more active during the latter portion of 2023 due to a decrease in inflation and an increase in consumer trust, likely bringing about a growth rate of between 3.6% and 4.7% which is higher than the 1% to 2.3% in the first half of the year.
The analysis shows that although food sales growth will experience a slight decrease in the latter part of the year, it will not decrease as much as the projected dip in food inflation. Hence, the volume of sales will weaken gradually over the period. Alternatively, non-food sales are predicted to increase from a position of decline.
The period of 2022 was exceptionally hard for both customers and retailers. As expenses throughout the supply chain were already on the rise, the conflict in Ukraine caused inflation to soar – food and energy costs surged by more than 10% in the latter part of 2022.
During the same time frame, inflation was very high, and the cost of living went up dramatically. Although the overall retail sales growth was 2.3%, when taking the inflation rate of more than 11% into account, sales volumes of both food and non-food items experienced a decrease.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said that during the Christmas period, it was a difficult time for a lot of British homes. Not only did the extreme cold demand more expenditure on energy bills, but the price of numerous essential foods also went up due to the consequences of the war in Ukraine, which kept the expense of animal feed, fertilizer and fuel high.
2023 will see the return to the high street for all of our retail clients, with shoppers expected to enjoy the experience of being out
Chris Norton Prohibition PR
Chris Norton, Director of Retail Public Relations agency Prohibition P, stated that retailers had reported an increase in consumer spend in the last quarter of 2022 and predicted a strong 2023 with the return to the high street. Retailers made efforts to reduce their surplus inventory resulting from supply chain disruptions by offering discounts, which allowed customers to purchase gifts at discounted prices. This resulted in fewer price hikes in non-food items cancelling out the more costly food items, ultimately leading to a stabilization of prices overall.
2023 is expected to be a difficult period for consumers and businesses alike, as inflation does not appear to be decreasing anytime soon. Retailers will strive to help their customers and maintain prices at an affordable level. Dickinson believes that the government to make their plans for future financial support clear soon, otherwise the public could suffer the consequences.
Kris Hamer, the Director of Insight from the British Retail Consortium, stated that the initial six months of the year will be arduous for households and retailers. Prices will appear to be increasing because of the persisting inflation, however, consumers will keep on monitoring their expenses, so the number of sales is expected to decline.
Currently, there is not much evidence that retailers’ operational costs will lessen, with analysts predicting a £7.5 billion increase in energy expenses when the government’s Energy Bill Relief Scheme terminates in March, leading to a continuing increase in prices.
Harmer further said there is reason to be hopeful for the latter part of 2023, when it is anticipated that inflation will decrease and people’s trust in the economy will become more positive, leading to an increase in sales and the number of goods being sold.
Even though they are dealing with significant financial issues, retailers will still do whatever they can to make sure their prices are reasonable for their patrons. The market is still very competitive, and every store is determined to bring in and keep customers since shoppers are still careful with what they buy.
