Some fair old discounts were noted around the store; with BBQ’s reduced to clear, but a feeling of more to be done in terms of clearance actions.
This initial effort should yield some reward, it was payday for many and should drive trade and enable the movement of some products.
However it does raise a question about the general sentiment of the consumer, with confidence falling through the floor, near hyperinflation like cost increases on some raw materials for supply side and record high fuel prices too….. It’s not good at all.
The wall to wall coverage around the cost of living crisis only serves to heighten the concerns for consumers and with another rise in energy prices hitting households in the Autumn, just as all the fixed deals (ones that are left at least) come to an end, people have one eye on that, for sure.
The challenge for customers remains that fixed income families and households are faced with real life challenges, every day. With fuel nearing £2 a litre now, every extra spent there means cutbacks elsewhere.
For this reason, like the last recession, we saw non-discretionary spend fall dramatically as people decide to “make do” with last year’s BBQ for example.
For Tesco, they reduced their reliance on non-food dramatically under Dave Lewis, abandoning Non Food online and click/collect, focusing on Food and lowering prices to become a destination once again.
They still have large stores with non-food taking a fair proportion of that space, however, despite their lowered reliance on the category.
But for others in the market; Sainsbury’s for example. They too retain large stores with vast non-food spaces. They have their Argos business too, which is heavily centred around non-discretionary non-food offerings.
Plus their expansion of Habitat as their leading brand in stores, perhaps some of their customers will be insulated from rising prices, more so than others. Nonetheless, there’s no escaping that costs are rising for everyone.
It could be difficult times ahead for sure.
