More than half of UK consumers are concerned about rising inflation as retailers grapple with supply constraints.
This according to new research from Retail Economics which found that one in three consumers have faced difficulties in getting the goods they need. Among those experiencing difficulty, 55% have had acute problems obtaining goods they need (representing 17% of consumers), while 45% have typically managed to resolve finding what they need despite challenges.
Supply constraints on the back of labour shortages and shipping delays have come at a time when businesses are grappling with heightened demand as normality returns.
As the government begins to unwind stimulus packages put in place during the pandemic and plans to raise national insurance contributions, retailers are set to face further upward pressure on costs going forward.
Retail Economics found that consumers are worried about additional costs being passed onto them, with 54% concerned about rising costs of living. Concerns about inflation are now at the highest level in more than five years.
The research showed that those most worried about inflation are consumers who have already experienced difficulties in obtaining the goods they desired. Indeed, of those consumers who have experienced supply chain issues, 70% are concerned about inflation.
Nicholas Found, senior consultant at Retail Economics, commented: “Issues around Brexit and the strain of the pandemic has created a perfect inflationary storm and households are already feeling the squeeze on their personal finances.
“The cocktail of labour shortages, supply chain disruptions and additional Brexit friction will add further upward pressure on businesses going forward. With the retail industry run on such thin margins, it will be inevitable that some of these costs will have to be passed on to consumers.
“Faced with rising prices and the prospect of a hike in national insurance contributions, it points to consumers being squeezed at a time when the economy needs consumers to drive the economic recovery.”
NAM Implications:
- Supply constraints on the back of labour shortages and shipping delays have come at a time when businesses are grappling with heightened demand as normality returns.
- Meaning consumers switching brands/shops?
- And fears of higher inflation…?
- In which case, at what rate?
- See Pound in your pocket inflation
