Home Business News The cost-of-living crisis is hitting retailers hard, but it’s not all doom and gloom

The cost-of-living crisis is hitting retailers hard, but it’s not all doom and gloom

by LLB Finance Reporter
18th Aug 22 10:41 am

The time is ripe for the revival and reinvention of British high streets. However, while the majority of UK consumers (81%) believe that the Government’s Levelling Up and Regeneration Bill is a good scheme, retailers (63%) are more dubious about the impact it will have.

This is one of the key findings from new research published today by Ankorstore, Europe’s fastest growing curated marketplace.

The research – Ankorstore’s Summer Retail Trend Report – looked at the varying views of UK consumers vs. retailers towards the Government’s levelling up bill, and its mission to reduce rents,  fill vacant units and increase the attractiveness and vitality of British high streets. The reality is that over two thirds of retailers (69%) believe consumers are keen to shop locally, but cite a number of challenges that impact this revival, including the cost of living (74%) and higher rents (71%).

The cost-of-living crisis is hitting retailers hard, but it’s not all doom and gloom

In today’s highly complex and competitive retail landscape, 92% of retailers agree that British high streets are struggling to cope with increasing pressures.

In fact, these factors are seen as almost twice as damaging to British high streets than Covid; whilst 74% of retailers cited inflation and the cost of living as the key cause, only 45% stated that high streets were struggling due to the pandemic.

Other causes attributed to this decline are higher rents (71%), increased online shopping (70%) and rising parking costs (38%), all of which are impacting UK retailers’ abilities to operate.

However, there is optimism for the future of British retail. Most notably, over two thirds of retailers (69%) believe that all consumers are keen to shop locally, as the local shopping trend continues to pick up steam. There is also indication that retailers on the ground are seeing life slowly return to towns and cities, with 98% of those operating online agreeing that British high streets were struggling, compared to only 86% of retailers who run a physical store.

Speaking on the findings, Mary Portas, British retail expert and broadcaster, said: “Community is at the heart of British high streets – and right now they are facing challenges from all angles. It’s vital that we together create resilient and revitalised high streets that meet people’s needs. It’s not just about doing business – it’s about doing business in the right way, and championing real change for new and independent retailers.”

What do consumers want from their shopping experience?

For retailers looking to boost foot traffic and increase sales, monitoring and responding to consumer trends should be at the top of their agenda.  Today’s shoppers are increasingly looking for unique products they can’t buy online (71%), along with sustainable products (62%) and location-centric products that support the local area (47%).

Retailers also highlighted the top three factors they’re seeing inform consumers’ purchasing decisions: cost (79%), product quality (68%) and sustainability (43%) came out as the most influential factors that have the potential to make or break a purchase decision. Brits are buying better, more affordable products, which is a positive outlook for smaller, independent retailers.

The same can be said for the types of businesses consumers want to see on British high streets. At the top of the list are independent supermarkets (45%), craft stores (36%) and clothing boutiques (36%), signifying that consumers are looking for more personalised shopping experiences.

Britain is building a generation of shopkeepers, but what does the future of retail look like?

We live in a nation of shopkeepers, with 83% of Gen Zers (16-24 year olds) having considered starting their own business, and four in 10 (39%) actively plan to do so. This is compounded by the fact that the majority of UK consumers (81%) think the Government’s levelling up bill is a good scheme, where landlords will be required to offer lower rental prices for empty spaces. The hope is that  as more retailers open physical stores, the option to shop in different places will attract and maintain a thriving community of shoppers.

That being said, whilst almost two thirds (64%) of British retailers agree the levelling up bill will make a positive impact, 38% either do not agree or have a strong opinion on the matter. The reality is that store owners might be keen to drive increased footfall, but they are less certain about the government’s ability to deliver on its levelling up promises.

If the scheme is implemented successfully, 61% of online retailers would consider moving to a physical store, with 63% stating this revival could be a good way to increase competition. Brits want their high streets to be diverse, lively and thriving  – with the right support and increased engagement from younger generations, the future is looking promising.

Tarun Gidoomal, UK General Manager at Ankorstore, said, “Our mission at Ankorstore is to help level the playing field for local and independent retailers, who are facing immense external pressures.

“A huge part of this involves giving retailers the confidence,  tools and purchasing conditions they need to thrive on British high streets. Times are tough right now, but post-pandemic shopping habits show that consumers want to shop local. That’s why we are helping to connect independent brands with local retailers.”

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