Retailers pessimistic heading into peak season, research finds

Over half of UK retailers are concerned about their businesses’ financial performance over the upcoming peak season against a backdrop of inflationary pressures and the rising cost of living, according to new research from Flintfox.

It revealed that although three in five (62%) say they will be running Black Friday promotions, around half are expecting a lower volume of sales (49%) or lower margins (53%).

When asked about the size of promotions used to drive sales, only 15% of UK retailers that plan to introduce promotions said they will be offering bigger discounts than in previous years, in contrast to 85% of Australian and 54% of US retailers.

The research also looked at the trading environment factors that are causing most concern, highlighting that three quarters (76%) were worried about consumers spending less, half (52%) about the impact of disrupted supply chains, and a smaller number about inventory challenges (23%) and surplus stock (16%).

With these factors to consider, the majority (69%) thought sales pricing is more complex this year and with Black Friday only a month away, 29% still don’t know how they will be approaching promotions and discounts.

John Moss, CEO of Flintfox said: “As businesses navigate their way through volatility and challenging market conditions, it is no surprise that there are concerns and feelings of uncertainty heading into peak season.

“In what have previously been the busiest and most profitable months of the year, retailers are now having to anticipate changes to the trading environment, and manage the impact of changing consumer behaviours.

He added: “Pricing promotions during peak can be a huge draw for customers, but to really make the most of them, businesses will need to be sure that they have the ability to execute their pricing strategy, and quickly pivot to respond to consumer demand, all the while protecting margin and profits at such a crucial time of year.”