A decline in foot traffic on British high streets threatens to worsen as retailers fear Trump tariffs will have a chilling effect.
Retailers Fear Trump Tariffs Will Worsen Footfall on UK High Streets
Shoppers stayed away from the UK high street in March, with footfall declining 5% and stores warning that US trade war could have a chilling effect. The recent rise in inflation and pressure on pay packets since January’s sales may be contributing to this downturn.
Economic Uncertainty Takes Toll on Consumer Confidence
Jobs surveys show levels of unemployment rising, while job vacancies falling as employers shelve investment plans and become more reluctant about hiring. ‘A survey by ‘KPMG‘ and the Recruitment and Employment Confederation (REC) found that permanent placements have declined in each month for the past two-and-a-half years.’
Retailers React to Economic Downturn
Some retailers, including Tesco, are cutting prices to lure back cash-strapped shoppers. This week, the supermarket announced it would be reducing prices of hundreds of items in competition with Asda, Aldi, and Sainsbury. ‘This week, the supermarket announced it would be reducing prices of hundreds of items in competition with ‘Asda, ‘Aldi, and ‘Sainsbury‘. Asda promised its biggest price cuts for 25 years to make it more competitive._
Consumer Confidence Survey Reveals Widespread Concerns
A consumer confidence survey by Deloitte found widespread concerns about personal finances. A majority reported a decline in their disposable incomes, with almost half (47%) of consumers saying they had only been spending on essentials in the last three months. ‘The number of people saying they only spent on essential items rose to its highest level since 2011.’
Rising Costs and Inflation
Employers have coped with higher national insurance payments and a rise in the minimum wage, while households have been hit with tax and price rises, including an average council tax increase of almost 5% and water bill increases. ‘The cost of gas and electricity went up by 6.4%, or £111 a year, at the beginning of the month.’
Government Intervention Needed
“The government needs to find ways to boost consumer confidence and ensure retailers can invest in jobs and stores.” The upcoming business rates overhaul could make the situation worse for thousands of retail stores caught by the proposed new, higher threshold.
