UK retail sales underwhelming amidst inflation
Retail experts advise UK retailers to be transparency as customers are still prudent in spending because of the inflation crisis Mossholder

Due to the rise in spending over Valentine's day, British Retail Consortium (BRC) announced today that retail sales saw an expected rise in February by 5.2 per cent. Looking at the big picture and comparing the retail sales to this same time in 2022 - where sales were higher by 6.7 per cent, it shows an underwhelming performance.

Reacting to this, Benoit Soucaret, Chief Experience Officer at Merkle Experience & Commerce, UK, explained that although there was a rise in retail sales by 5.2 per cent in February, the cost of doing business continues to increase, and product prices will still be high.

"Fluctuations in consumer demand are a welcome change for businesses amid the current economic climate, but these are out of retailers' control," said the chief experience officer.

Soucaret believes it is possible retailers will soon resort to the downward trend "as rises in consumer spending will be short-lived". He added that retailers must be transparent, which will be the ultimate currency for loyalty. This is because customers will be much more selective in spending.

According to Soucaret, in an uncertain economic climate, UK retailers have to consider that it is about something other than what customers want again but what they need.

He further said, "Everything else becomes secondary. Retailers must be honest with their customers about price rises and offer alternatives such as discounts and useful loyalty programmes."

Non-essential UK retailers, he noted, have lesser opportunities to be distinct and "leave a long-lasting positive impression with consumers", adding that it is important "that audiences are put first amid tougher times".

Soucaret advised, "Right now, retailers that play the long game will ultimately have the best chance at success."

Nick Delis, Senior VP of International and Strategic Business at Five9, also commented on the expected rise in retail sales. He too said much of the retail sales rising by 5.2 per cent in February is being masked by the cost of living crisis - inflation.

Delis noted that inflation is contributing to how customers spend, as it has raised the cost of commodities. The Senior VP insists that there had been a change in the attitude to which customers purchase things, as they only spend on the essentials. He disclosed that the mid-priced UK retailers feel the customers' impact the most because their customer-base flocks more and more towards discount chains.

He said, "We're seeing retailers across the board trying new techniques to win over consumers - price matching and price locks, discounts in areas where they're not typically seen, and the introduction of longer sales periods to create their own supply and demand matrix."

However, Delis pointed out that price points should not be presumed to be the "secret ingredient to brand loyalty". He noted that "it takes only one bad experience for a shopper not to return" to a retailer.

According to Delis, making customers feel valued by retailers is a start to winning them. He believes a good example of this is "providing personalised communications or tailored rewards via loyalty programmes, in addition to timely and helpful responses to queries". He said amazing and consistent experiences like these, "rather than as a one-off, will translate into a loyal customer base moving forward".

Also, Rebecca Crook, Chief Growth Officer EMEA, CI&T, responding to the increased retail sales in February, as compared to last year, said, "Times are tough for UK retailers, and with further store closures likely to be announced by brands in the coming months, they must implement a strong digital strategy to survive this trying period."