Ninety-five per cent of UK retail chairs forecast a drop in shopper spending over the next year, as Boots’ parent company chair Stefano Pessina said the UK would likely have a “bigger” recession than other EU countries.
The vast majority of UK retail chairs said they expected the decline in spending to be exacerbated by supply chain issues and the war in Ukraine triggering further rises in inflation.
According to Korn Ferry’s annual retail chair study, over half (60%) of UK retail chairs said they were also concerned or very concerned about the economic outlook over the next year due to the huge uptick in living costs and the decline in disposable income for UK shoppers.
Walgreens Boots Alliance chair Stefano Pessina said these factors, compounded by the economic impact of Brexit, would mean the UK “will have a big recession; probably bigger than other European countries”.
Eight out of 10 chairs said their businesses were still having to deal with the effects of Brexit, which has increased red tape and added significant operational costs.
Despite this backdrop, they were cautiously optimistic about increasing business investment. Six out of 10 of the 40 chairs surveyed said they were either slightly or significantly increasing store numbers over the next 12 months, while 65% said they already had boardroom remuneration linked to ESG targets or planned to introduce them in the near future.
Overall, 60% of retail chairs said they planned to increase investment in their businesses year on year, while only 10% planned to decrease investment.
Korn Ferry head of UK consumer practice Sarah Lim said: “The knock-on effect of the pandemic, supply chain issues and the Russia/Ukraine crisis is already clear: consumers are more cautious, have less money in their pockets and are increasingly worried about rising costs.
“In this complex and evolving environment, retail leaders must remain agile, tackling issues as they arise while keeping an eye toward longer-term success.”
No comments yet