Retailers may experience lower revenues this winter on top of higher energy prices, making energy management more important than ever
In the week commencing 2nd October, the number of visitors to shopping areas dropped significantly. This also happened to be the first week since the October increase of the energy price cap, raising the price of utilities for people all over the country.
Footfall slipped by 0.2% on the previous week across all UK retail destinations, with shopping centres and retail parks suffering the most.
Insights director at monitoring group Springboard, Diane Wehrle, said the results found drops in almost all parts of the UK, reaching more than 2% in some areas. Wehrle states that this “may well be an indicator” of the impact of the higher energy costs consumers are now experiencing.
She continues: “This is a clear contrast to the week before, when footfall rose universally across all areas of the UK.”
At this time of year, shopping levels should be rising
One reason the drop in shopping levels is so worrying for retailers is that this is typically the time of year when the number of people shopping begins to rise, as the run-up to Christmas shopping begins.
Instead, customers appear to be cutting back on the number of items they’re buying in an effort to offset higher prices and bills. This compares to September when sales rose 2.2% despite spending being down 0.4%. This implied that the effects of inflation were taking hold, with food spending up 4.6%.
Households made significant cutbacks to clothing and dining out spending last month, by 4% and 12% respectively, according to Barclaycard. Overall card spending only rose 1.8%, which marks the lowest increase since February 2021 – a time when the UK was still in lockdown.
Chief executive of the British Retail Consortium (BRC), Helen Dickinson, commented on the latest spending figures, saying: “A difficult winter looms for both retailers and consumers. Costs are increasing throughout retailers’ supply chain, the pound remains weak, interest rates are rising, and a tight labour market is pushing up the cost of hiring.”
These are sentiments echoed by Esme Harwood, the director of Barclaycard: “Energy price increases are understandably causing concern for Brits, as they worry whether they will have enough money to cover their household bills. Consumers are taking a savvy approach to budgeting […] which is having a knock-on effect on retail and hospitality sectors.”
Some of the UK’s leading retailers, including Next, Asda and Marks & Spencer, have stated that they are expecting a downturn in consumer spending this autumn and winter as households struggle with higher energy bills.
Commercial energy management is more important than ever
With profits being squeezed and bills rising, it’s a tough time for businesses, which is why controlling your energy use is so important this winter. Using appliances more mindfully, getting employees on board and choosing the right supplier and agreement can all help you make the most of your energy spending.
Businesses should expand their efforts even further by reaching out to experts for guidance and support. From finding you the best energy contract to helping you with waste and water management, our team are on hand to help you maximise efficiency and sustainability in every aspect of your business. With years of experience under our belt, we can help you navigate the tremulous energy market, ensuring you are compliant with all existing legislations and doing everything possible to support the environment and make the most of your budgets.
Reach out to a member of our team today and find out how we can help you. Get in touch with the team at Consultiv Utilities.