The Six Actions Retailers Should Take In Times Of Inflation

2022 has been difficult financially for consumers and retailers alike. Inflation has hit a 40-year high, sparking a cost-of-living crisis. And it’s projected to reach heights of 18 per cent next year. Meanwhile, the Bank of England has increased its interest rate to 1.75 per cent in a bid to gain control of the situation. It’s going to be a difficult period for retailers to navigate, but there are steps you can take to react confidently. Below, we explore how you can respond.

How inflation is affecting the UK market

Consumers have had less spending power this year due to inflation. And the result has been retail sales for June 2022 falling one per cent below sales in the same month the year before – despite the added demand created by platinum jubilee celebrations. The rise in fuel, energy and grocery costs for consumers has helped create this situation. With such a slow market, retailers will need to act carefully during this time of inflation.

Adapt to new consumer behaviour

One of the best steps retailers can take is to adapt to new consumer behaviour. The combination of the pandemic and inflation has altered consumer behaviour significantly. With many people visiting the office less often and new wellness values, brands will have to shift their marketing and their approach accordingly.

Rethink operations

It can also help to rethink your operations and processes during inflation. By running your store more efficiently, you stand more chance of withstanding this difficult time. You can deploy analytics to work out the best places to cut costs or invest in new technology to push your retailer to the next level.

Retain talent

During inflation, it can be tempting to cut costs by making staff redundant. However, a talent drain can put your retailer in a weak position in the long run – regardless of whether you’re releasing management of frontline staff. Try to keep your talent in the business during this time to give yourself the best chance of bouncing back.

Increase agility

This period of inflation will require nimble thinking and actions. By having the capital and agility to make quick, intelligent decisions, your business can still thrive.

Sometimes though, approaching business lawyers will be your best option during this difficult time. Inflation can put any retailer under pressure, even if you consistently make wise decisions. But by restructuring and moving forward, you’ll give your business the best chance of bouncing back.

Deliver value

Now, more than ever, consumers are looking for real value from their purchases. If you’re marking your prices up, ensure that customers are getting a service or product worth their outlay.

Sustainability

Sustainability is now a key concern amongst consumers. Indeed, 68 per cent of consumers say that doing things that benefit the environment makes them feel happy. If your business has poor environmental standards, you’ll lose customers. By pivoting towards more sustainable practices, though, you can stand out from the competition.