Britain’s retailers worry as consumers trickle back
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London — Spending by shoppers, drinkers and diners is vital to Britain’s effort to emerge from its deepest recession for three centuries.
News last week that retail sales rebounded by more than forecast in July stood out against a backdrop of unprecedented job cuts at Marks & Spencer Group, a report that consumer confidence remains in the doldrums and the prospect of more local lockdowns after a spike in infections.
The UK economy relies on consumer spending more than most other countries in Europe, accounting for 63% of output compared with about half in Germany and France.
The retail industry has been open for almost two months in much of the UK after a lockdown imposed in March, after similar reopenings across the continent. But people in Britain seem to be venturing back out to stores, restaurants and bars more slowly.
Businesses that make up the backbone of the economy are struggling to navigate the next stage of the pandemic, based on interviews with people running supermarkets, restaurants, a hair salon and a clothing store.
Government rescue programmes have kept many companies on life support during the pandemic, though many are now coming to an end.
Pub chain JD Wetherspoon said on Monday revenue was rising only because of subsidies for eating out. Businesses are having to quickly reduce costs and prepare for a potentially prolonged period of fragile consumer sentiment.
The pandemic is also accelerating structural changes in the way consumers behave with more people eating at home and shopping online. Supermarket chain Tesco is planning to create permanent roles for 16,000 new workers in its internet business.
The next step in the road to some semblance of normality is getting children back to school, a critical plank in the revival because it would allow more parents to return to work and potentially repopulate city centres.
There is not “much momentum to get excited over”, Katie Cousins, an analyst at Shore Capital, said after the UK office for national statistics reported a 2% increase in retail sales in July from June. “The country remains in a fragile economic state and we see further struggles ahead. Both businesses and consumers are continuing to feel worried.”
The following is a snapshot of the concerns over consumer spending.
Supermarket executive
Asda, Britain’s third largest grocer, tracks family spending power and its latest figures show it decreased by 2.2% in the year to ...
News last week that retail sales rebounded by more than forecast in July stood out against a backdrop of unprecedented job cuts at Marks & Spencer Group, a report that consumer confidence remains in the doldrums and the prospect of more local lockdowns after a spike in infections.
The UK economy relies on consumer spending more than most other countries in Europe, accounting for 63% of output compared with about half in Germany and France.
The retail industry has been open for almost two months in much of the UK after a lockdown imposed in March, after similar reopenings across the continent. But people in Britain seem to be venturing back out to stores, restaurants and bars more slowly.
Businesses that make up the backbone of the economy are struggling to navigate the next stage of the pandemic, based on interviews with people running supermarkets, restaurants, a hair salon and a clothing store.
Government rescue programmes have kept many companies on life support during the pandemic, though many are now coming to an end.
Pub chain JD Wetherspoon said on Monday revenue was rising only because of subsidies for eating out. Businesses are having to quickly reduce costs and prepare for a potentially prolonged period of fragile consumer sentiment.
The pandemic is also accelerating structural changes in the way consumers behave with more people eating at home and shopping online. Supermarket chain Tesco is planning to create permanent roles for 16,000 new workers in its internet business.
The next step in the road to some semblance of normality is getting children back to school, a critical plank in the revival because it would allow more parents to return to work and potentially repopulate city centres.
There is not “much momentum to get excited over”, Katie Cousins, an analyst at Shore Capital, said after the UK office for national statistics reported a 2% increase in retail sales in July from June. “The country remains in a fragile economic state and we see further struggles ahead. Both businesses and consumers are continuing to feel worried.”
The following is a snapshot of the concerns over consumer spending.
Supermarket executive
Asda, Britain’s third largest grocer, tracks family spending power and its latest figures show it decreased by 2.2% in the year to ...
