The UKs cost of living crisis has dominated headlines and bottom lines so far this year and it shows no signs of letting up any time soon. Alongside yet another interest rate rise this month, an increasingly gloomy Bank of England predicted that inflation will peak at 10.2% towards the end of 2022. With wages simply unable to keep up, UK households are facing a reduction in household disposable income of around 1.75% this year.
With the rising cost of the most basic day to day items, the recent hike in energy prices with another on the way in October and geopolitical uncertainty, it’s no surprise then that UK consumers are already starting to tighten their purse strings. According to the ONS, retail sales were down by 1.4% in March…before the real sting of the energy price hike has been felt.
So of course, consumers are spending less, cutting back on luxuries and non-essentials, or simply stopping spending altogether until something shifts. What does this mean for UK retailers?
Short Term Pain
There will likely be a further significant drop in sales as shoppers feel the pinch and perhaps are waiting to see what will happen next – whether inflation slows, whether the government steps in. There are lots of unknowns and uncertainty causes inertia.
It’s the right time for retailers to stock take
In times of economic downturn, retailers really do need to have the tightest handle over their bottom line. How do you do this? Effective stocktaking definitely helps. You need to ensure that you do not tie up capital in stock that isn’t shifting. Or, worse, in perishable stock that simply won’t survive the downturn. Now is the time to really know your business inside and out including what’s sitting in your stock room.
However, an effective stocktake can give you so much more than those base line stock numbers. Understanding the trends of your particular business and consumer behaviour over time will help make earlier, better-informed decisions going into the latter part of a potentially difficult year. It’ll be easier to weather yet another economic storm if you know your business inside out and have great practices in place to manage your stock holdings.
If you need help carrying out your stocktake or training up staff to better support your business this year, get in touch with our team of expert stock takers today.
