British Retail Consortium: Financial outlook for 2025

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As Britain's high streets continue to face mounting challenges, public opinion remains divided on how best to breathe life back into these once-bustling hubs.

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00:00For consumers, wage growth is expected to still be strong-ish, so we've seen some fairly

00:08strong wage growth over the past year that has slowed somewhat, but we are still expecting

00:13it to bob around the 4% to 6% range, so depending on movements with inflation, and it is likely

00:18that following the autumn budget we are going to see a bit more inflation than we otherwise

00:23would have seen, so that is likely to impact purchasing power of consumers, and so it

00:30might put a bind, or it might put some downward pressure on discretionary spending. Now, with

00:37retailers, they've had to deal with quite sizeable increases in their input costs, and

00:42they're set to face even greater increase in their input costs, as I say, following

00:47the budget. You've got the employer national insurance contributions increase, the national

00:51living wage increase coming into effect, this is all going to jack up their input

00:56costs by quite a considerable amount, so retailers will of course look to make efficiencies and

01:02not just absorb the entire impact.

01:05According to the experts, it's not just the amount that we're spending that has an impact

01:08on retailers, it's how we're spending too.

01:12So people are doing a lot more spending online than they say would have back in 2019, cast

01:17your mind pre-Covid, so before it was roughly one in five items were purchased online, now

01:24it's roughly about one in four. I think I'd add a slight nuance there, so it's not just

01:29online versus high streets, but we have to look at other different location types, so

01:33retail parks are something that is growing in popularity, and so when shoppers do do

01:40their shopping physically if you like, they are preferring destinations such as retail

01:47parks as compared to high streets, and so we're seeing that grow in popularity, but

01:55still a lot of shopping is still done physically.

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