Peak season spending to take 4.4 billion pound hit as consumers cut back

New research by Metapack and Retail Economics has suggested that spending throughout the UK’s ‘peak’ season will take a multi-billion pound hit as consumers cut back on non-essential shopping.

According to the duo’s report, British shoppers are expected to reduce their non-food spending by 4.4 billion pounds this year as the cost-of-living crisis continues to take a toll on the region.

Metapack’s survey also covered seven additional markets, including the US, Germany, France, Spain, Italy, Canada and Australia, finding that collectively the surveyed regions will be spending over 36 billion pounds less during peak season compared to last year.

While consumers in the UK appeared to be set to cut back the most, 58 percent of the total shoppers surveyed were expecting to decrease their spending.

It comes as inflation continues to see a decade-high surge, increasing prices for food, fuel and energy, and putting pressure on consumer living standards.

Clothing and footwear to be hit the hardest

In the report, almost 30 percent of consumers across all markets cited inflation as the biggest concern, with 18 percent highlighting uncertainty about the economy and 12 percent expressing concern about a lack of savings.

Additionally, nine in 10 businesses surveyed said they expected to be negatively impacted by rising costs in the peak season.

It also looked as though clothing and footwear retailers are set to be hit the hardest in the coming months, with 26 percent of consumers set to cut back on apparel spending.

However, despite concerns, surveyed retailers affirmed plans for sales volumes to increase this year.

According to the report, 48 percent of large businesses are planning for an increase in volume orders, while 27 percent of small retailers suggested an increase of more than 10 percent.

Speaking on the report, Andrew Norman, general manager of Metapack, said: “Our research highlights that retailers are forecasting growth this peak season, while consumers are looking to reduce their spending.

“There is a gulf that needs to be addressed between retailer expectations and consumer sentiment, and one that will need to be navigated carefully through this current economic climate.”

Norman went on to say retailers should consider implementing an omnichannel strategy that appeals to a wide range of consumers and taking on proactive measures, such as a greater choice of delivery options.