Could we see a Retail Recovery?

As we all know, interest rates have been steadily rising this year. Higher interest rates equal higher mortgage rates, which means less money for householders to spend.

Then came the Autumn Statement. Tax thresholds frozen equals more to pay in taxes equals less to spend in the shops.

The situation has been much the same in the US. Interest rates have risen steadily through the year. The latest rise – the sixth consecutive rise this year as the Federal Reserve continued its battle with inflation – led some commentators to say that mortgage demand was at ‘Depression levels.’

And yet we have just had Cyber Monday in the States: the Monday after Thanksgiving – and a day specifically created by retailers to encourage people to shop online. With steadily rising interest rates, you could be forgiven for thinking that Cyber Monday was something of a damp squib this year.

You could not be further from the truth. With big discounts on offer, spending hit a new record of $11.2bn (£9.2bn). That was 5% up on the figure recorded in 2021: with Black Friday also up on last year – by 2.3% with sales of $9.1bn (£7.5bn) – some analysts were openly wondering if retail in the US had turned a corner.

What about the UK? Was it – as one headline had it – ‘Black Friday or Bleak Friday?’ Although the final figures were not to hand at the time of writing this article, the early indications were promising. ‘Shoppers set to fork out more this year’ was City AM’s headline, quoting a forecast from Nationwide that its members would spend 7% more than last, at a rate of £222,000 per minute.

Black Friday this year, of course, coincided with a winter World Cup that would apparently, ‘see fans flock to the shops to buy TVs and football Christmas décor.’ Sadly, that headline was written before Harry Kane stepped up to take his second penalty…

Irrespective of the figures, one thing is abundantly clear: the nature of retail is changing, and changing rapidly. Much reported research from the BBC, based on information from Ordnance Survey, revealed that since lockdown, UK high streets have seen 2,000 more cafés, 700 pubs, 4,600 fast-food outlets and 350 tattoo studios. This has come at the expense of department stores, bank branches and clothes shops, as our high streets become social spaces as much as shopping destinations.

Could we see a retail recovery? The answer is ‘yes,’ but it is a new type of retail. As always success comes from giving the consumer and the shopper what they want, and reacting rapidly to changing circumstances, interest rates and inflation. You need to look no further than the battle between the traditional supermarkets and the discounters to see that.

Many of our clients running SMEs have been impacted by these changes over the last two to three years. We’re delighted to say that, in the main, they have adapted their businesses to the changing landscape – and we’re pleased to have played our part in taking care of their financial planning, allowing them to devote all their attention to their businesses.

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The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK. Welby is a trading name of Welby Associates Wealth Management Ltd Company Registered Number NI630504 who is authorised and regulated by the Financial Conduct Authority, FCA register number 697372. The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren't able to resolve themselves. To contact the Financial Ombudsman Service please visit

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