In the midst of a cost-of-living crisis, record-breaking inflation and supply chain issues, the UK retail industry has been up against a challenging market and it seems in the new year it may not vastly improve.
According to a new study by the British Retail Consortium (BRC), retail sales are only set to grow between 2.3 to 3.5 percent in 2023, low percentages that had also defined 2022.
The organisation did note sales are expected to pick up in the second half of the year, as inflation potentially slows and consumer confidence improves.
Growth is expected at the rate of one to 2.3 percent for the first half, and 3.6 to 4.7 percent in the second.
This comes in comparison to the 2022 numbers, where total retail sales growth for the second half came in at 2.3 percent, reflecting little change for the months coming.
Non-food sales move to growth
BRC’s analysis further suggested that, while food sales will remain one of the strongest categories, non-food sales will move from decline to growth.
In a statement, Kris Hamer, director of insight at the BRC, said: “The first half of the year is likely to be challenging for households and retailers.
“Ongoing inflation will make sales appear to be rising, but we expect falling volumes as consumers continue to manage their spending.
“We also don’t see many signs at this stage of retailers’ input costs easing, with energy costs expected to rise by 7.5 billion pounds as the government’s Energy Bill Relief Scheme comes to an end in March, putting ongoing upwards pressure on prices.
“There is cause for optimism in the second half of 2023, when we expect inflation to ease and improving consumer confidence to result in an improvement to sales growth, and corresponding volumes.
“Despite facing huge cost pressures, retailers will continue to do all they can to keep prices affordable for their customers. The market remains very competitive, and every retailer will be striving to attract and retain customers as people continue to be discerning in their purchasing decisions.”