The majority of 2022 has been defined by the cost of living crisis, soaring inflation and huge rises in energy costs, putting pressure on consumers and retailers alike. While forecasts suggest that inflation rates are close to peak levels, we expect that the looming recession will continue to be one of the main themes of 2023.
A lifeline that we’ve had through the last few months has been the supported wholesale price on energy, which has definitely helped some stores to stay afloat. At the time of writing, the Government is yet to confirm which businesses will be receiving additional support on energy costs, but we believe that they have been listening to our concerns and have made indications throughout the last few months, including at our Heart of the Community reception, that our sector will be included in the list of vulnerable businesses that get help on energy bills beyond March 2023.
If 2022 was the year of HFSS regulations in England, we believe 2023 will be dominated by yet more product regulation issues. The Welsh and Scottish Governments are still considering what to do with their own HFSS regulations and whether they should go even further than those introduced already, and we’re closely monitoring proposals put forward in Scotland to introduce widespread HFSS-like restrictions on alcohol products. The main change for retailers however will be in the introduction of a Deposit Return Scheme, first in Scotland, but with other UK nations set to follow. Whether you’re looking to install a reverse vending machine, accept returns manually, or seek an exemption for your store, there’s a lot of detail still to get right, so watch this space for detailed advice from ACS on all of the above.
While there will of course be significant challenges in 2023, there remains a prime opportunity for retailers to engrain themselves in their communities as a force for good during this uncertain financial period. We know that people think favourably about the role that local shops are playing during the cost of living crisis, and that community support will be incredibly valuable as the year goes on. We’re also expecting a change in the employment market – retailers have told us throughout 2022 that recruitment and retention have been extremely difficult, but with the impact of the recession beginning to be felt, overall unemployment levels are likely to rise providing a chance for stores to address problems with staff shortages … but all at a higher cost with the National Living Wage continuing to rise next year and into 2024.
Whatever the next year brings, I’m confident that retailers will continue to find time to innovate and develop their businesses and their relationships both locally and professionally. Learning (and borrowing) from each other is one of the most effective ways to grow, so it’s important that we all find time to work on the business, not just in the business.
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