Black Friday and the holidays are near. At this time, most sellers would want to have sales pick up. However, the UK High Street and physical stores seem to be experiencing just the opposite, with it dampening the mood.
A steep drop has been noted in sales this October. This drop is due in part to people spending less as many households struggle. CBI chief economist Rain Newton-Smith sees this slowdown as a result of high inflation.
“It’s clear retailers are beginning to really feel the pinch from higher inflation” Rain Newton-Smith, CBI chief economist.
“This shows lessening in consumer demand, even as the holidays are nearing. Family spending power has seen a drop as well.” Kay Neufield, Cebr Consultancy Economist
The economy to blame for high street struggle?
Naturally, London still has the highest in disposable income per household. However, other areas have seen this fall. Incomes in general have failed to rise with the current inflation rate. With these things happening many retailers are also responding by cutting back on high street presence.
While high street operations might have scaled back, their online counterparts have begun to thrive.
Stores such as Marks & Spencer have boosted their online presence, even as physical stores closed. This has resulted in more people going to their online outlets to purchase rather than hanging out in their physical stores.
Affected as well are employees, as stores cut down on jobs as well as store hours. This will likely start a cycle that may well see more online presence among stores.
There are many online retailers who have been successful even as their physical stores flounder, and this trend might likely continue in the future.
As the holidays come, many physical stores struggle to keep sales going. Online presence though might save many of these stores. What do you think would be the effect of this into the coming year? Let us know in the comments below.
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