The effect of the cost of living crisis is being revealed in our shopping habits with consumers looking for value-for-money and items with a longer shelf life.
With rising inflation leading to what is for many a real-term cut in their salary, shoppers are thinking twice about what they spend their money on and how they can save cash.
With the escalating Russian hostilities in Ukraine leading to energy price rises, the spectre of winter blackouts and economic uncertainty since the Chancellor's mini Budget, there isn't much to look forward to in economic terms.
All of this is having a chilling effect on spending - and the till receipts are revealing the true picture.
We take a look at what the numbers reveal.
Boomtime at the pawnbroker
North East pawnbroker and finance firm Ramsdens has hiked up full-year profit expectations on the back of strong performance.
The Middlesbrough company, which has 157 stores in the UK alongside its growing online business, reported that demand for pawnbroking loans grew during the year as a result of customer spending habits returning following the easing of restrictions related to Covid-19, and fewer alternative options for small sum short term credit.
Its loan book increased by over 40% to £8.6m - above the pre pandemic loan book of £7.7m at March 31, 2020.
The business also boosted revenue in its jewellery retail segment, partly aided by increased footfall post pandemic restrictions.
The firm, operates in jewellery, foreign currency, precious metals and pawnbroking segments.
The bargain hunters
According to an American Express survey of 2,000 UK consumers, over three quarters (77%) of Britons are increasingly focused on value for money, with 71% saying they proactively look for sale items when shopping.
Shoppers are waiting for flash sales or discount codes and that is causing problems for some retailers.
In July, upmarket retailer Joules reported “significant pressure” on its gross margins in its trading update with “customer appetite weighted toward mark downs amidst a heavily promotional environment”.
The firm, which has not ruled out a CVA as it looks to turn around the fortunes of the company, needs to get its pricing structure right or fall foul of the same reliance on discounting that dogged Debenhams before its collapse and online resurrection under the Boohoo Group.
In an article that examines what has gone wrong at Joules, Anne Phelan, senior director of retail at digital transformation business consultancy Publicis Sapient, said that shoppers were no longer clear whether Joules was a premium, boutique-style brand or not.
She said the ticket price was not high enough to be a luxury buy and it offered too many discounts.
She said: "It is now rare the Joules customer expects to pay full price for a product. All too often they are in a sales event so, as a customer, you know you will pay less than full price in the not-too-distant future if you wait.
"We have seen far too many retailers go down this route which has meant they eventually cease to exist."
Cash is king
Post Offices handled a record £3.45bn in notes and coins in August as cash makes a comeback during the cost-of-living crisis.
In September, £3.35 billion in cash deposits and withdrawals was handled at Post Offices.
As the cost of living bites, people are increasingly turning to cash to manage their budget on a week-by-week basis and often day-by-day, the Post Office said. Martin Kearsley, banking director at the Post Office, said: “We expect cash transactions to continue to exceed expectations in October and for the rest of the year.”
Holidays are on the wish list
Appetite remains among shoppers for big ticket items and leisure spending. The American Express survey revealed that 42% of those who have spare cash for leisure pursuits, the largest amount of their disposable income is going towards to holidays. And with 72% of consumers saying it remains important to treat themselves, it is clear shoppers are still prioritising ‘feel-good’ purchases.
Dame Irene Hays, founder of Hays Travel said the demand for holidays continues.
She said: "We can find holidays for people who are on a budget or those who want luxury, longer cruises or touring holidays, and we are seeing lots more people choosing to spread the cost by direct debit"
She was speaking as the company announced its first profit since the start of the pandemic - vindicating the decision to acquire hundreds of Thomas Cook shops in 2019 in a £7.8m deal.
The company has converting the loss of £35.6m for the 18 months to April 2021 to operating profit of £12.45m for the year ended April 2022. It also recorded Ebitda of £15.9m, up from a loss of £29.4m.
The results come despite a turbulent 12 months with ongoing coronavirus restrictions, the Omicron variant, the national recruitment crisis and latterly the Russian invasion of Ukraine impacting the whole travel industry.
Travel bookings increased by 221% and the group achieved a transaction value of £1.07bn, up from £747m in the previous 18 months.
Easy shopping and speedy delivery
Six in 10 (60%) respondents in the American Express survey say a convenient shopping experience remains a high priority, with two thirds (65%) valuing businesses that accommodate last-minute purchases and quick delivery.
One of the best retailers out there for choice and superfast delivery is Next but it has downgraded its profit forecast amid unprecedented uncertainty.
The fashion chain said sales were behind expectations last month but had picked up – possibly thanks to Government support for household energy bills.
After a good start to 2022, Next has cut its pre-tax profit estimates for the full year by £20 million to £840 million.
In results for the first half of 2022, the Leicestershire-headquartered business said full price sales and pre-tax profits were up more than 20 per cent on the same period, pre-Covid in 2019 – and it was doing what it could to maintain that momentum.
The high street giant – which has a reputation for its cautious forecasting - is one of the best players at managing difficult situations, said. Russ Mould, investment director at online stockbroker AJ Bell.
He said: “Given the outlook for UK interest rates, the moving parts Next has to consider seems to be changing by the hour and it’s not surprising the business is finding it very difficult to predict the trajectory of trading.
“Whatever is coming Next’s way the versatility of the business, which has allowed it to benefit from the recent preference for shopping in-store as opposed to online, a strong balance sheet, experienced management and its almost unmatched retail skills leave it well placed to endure.
“Next may find it comes out of the current turmoil in a stronger market position as rivals are either weakened or fall by the wayside entirely.”
DIY sales remain strong
Topps Tiles has reported a second record year for sales with trade up more than 10 per cent on 2021.
The tile specialist said customers had not dropped off following the pandemic home improvement boom, with sales reaching £247.3 million for the last 12 months. Pre-tax profit for the period is expected to be around £14.6 million.
The Leicester-based business said average weekly sales were 25 per cent up on pre-Covid 2019, partly due to rationalising its store network and improving store sales densities, and partly down to underlying growth, particularly in trade sales.
Read more from BusinessLive:
