Retailers are bracing for Brits to slash their spending this year after confidence in the economy fell to a new low.
Expectations for the economy worsened for a fifth consecutive month in February, according to a survey from the British Retail Consortium and Opinium, with half of those surveyed believing the economy will deteriorate in the next three months.
Even Gen Z – “the most upbeat generation on the economy and their own finances” – saw a drop-off in optimism, said the BRC.
CEO Helen Dickinson said “it was little surprise that many households are worried”, given many businesses’ warnings over National Insurance increases and impact of the rising energy price cap on domestic bills.
While the survey found a positive increase in expectations of personal spending, Dickinson suggested this might be driven by the expectations of higher prices in the future.
There was a widening gender divide in confidence this month, with women more pessimistic than men about both the economy and their own finances.
Many retailers are warning prices will need to rise in the next year to cover new additional costs, with some planning to cut back on jobs as a result.
Supermarket including Tesco, Sainsbury’s and Asda warned last week that at least 300,000 retail jobs could be lost from physical stores over the next three years – amounting to one in 10 shopfloor workers leaving retail by 2028.
A separate poll by the Federation of Small Businesses this week found around 33% of small businesses are now expecting to make job cuts, up from 17% at the end of October.
The FSB found that more than half of small firms believe that labour costs are one of the biggest barriers to growing their business.
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