Retailers have stocked up on festive goodies, but will anyone buy them?
Will it be a merry Christmas? It will certainly be one of the most uncertain ever for businesses. Inflation, the war in Ukraine and an erratic new cabinet are only adding to the jitters around Covid. And who knows whether England and Wales will bring joy or pain to football fans during the World Cup in Qatar.
Retailers were already feeling nervous before Liz Truss and Kwasi Kwarteng launched their mini-budget for growth – and sent the pound into freefall and mortgage rates soaring.
The industry may have bought its stock for the peak trading season, so the fall in the value of the pound will not affect prices or profits until next year. The main short-term concern before Christmas, when most consumer industries make the majority of their profits, will be consumer sentiment and spending power.
A pause in house sales, as uncertainty about interest rates puts the freeze on deals and clips buyers’ wings, is likely to mean a further slowdown for related businesses, from estate agents and builders to furnishing stores and DIY retailers, who are already suffering after the boom in home improvement during the lockdowns.
Those in rented accommodation may also fear rising costs as landlords increase their demands to cover more expensive borrowing. Talk of potential benefits cuts, and the impact of the cuts already implemented, mean even more pressure for those on a tight budget. They will be watching every penny, fuelling a further switch to discounters such as Aldi and Lidl and putting more pressure on traditional supermarkets to keep prices down, so hastening the decline of ailing chains Morrisons and Waitrose.
Over the summer, consumers have chosen to prioritise nights out and dressing for the occasion and trimmed spending on other
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