Retailers are facing a dilemma. Record inflation is forcing unwanted price increases while eroding already frayed consumer loyalty, hitting their bottom lines. Retailers can escape inflation’s grasp, and counter revenue erosion — but to do so, they must look far beyond their balance sheets.
With UK inflation rising to 9.1%, its highest levels in 40 years, it’s no wonder that total UK retail sales in May declined by 1.1% compared to May 2021. This gloomy trend reflects a wider downward turn seen globally, with the U.S. also facing a 40-year inflation high. In Australia, research from global bank Citi forecasted a ~$60 billion hit to consumers’ domestic retail spending capacity in FY23.
