Nightmare Before Christmas: Analysts Forecast Little Holiday Cheer For UK Retail
Shoppers pass graffiti on a closed retail unit near Oxford Street in London, Wednesday, April 13, 2022
UK consumers are reportedly limiting their holiday spending amidst high inflation and a looming recession. The FTSE 350 Retailers Index dropped 32% this year – the biggest fall since 2008. Deutsche bank and JP Morgan analysts have predicted tough times ahead for British retail as consumers cut their spending this winter. The news comes on top of an already hard year for companies due to higher costs and supply-chain problems. Christmas Eve is considered by analysts to be a time of “recovery trade”. However, this year the prospects of recovery are questionable at best. Research stresses that consumers are “overwhelmingly” planning to cut their costs: they will spend less not only on Christmas presents but also on social events and even food.However, even in this situation, there will be winners: discounters like Tesco and B&M European Value Retail. Similarly, not every forecast is that dismal. A NielsenIQ survey showed that 63% of households plan to keep their Christmas budget unchanged.The British economy is facing inflation that runs at a four-decade high. The energy crisis in European countries, UK included, was exacerbated by western sanctions imposed against Russia over its special military operation in Ukraine, and the energy crisis pushed millions of European households to the brink of fuel poverty.
