Customers holding back on spending as cost of living crisis intensifies, says retail boss

Overall retail sales are predicted to decline as people prioritise energy bills and other essential spending

Surging furniture prices helped to drive UK consumer price inflation to a 30-year-high of 7 per cent in March (PA)

The chair of Made.com has said the online furniture retailer has already witnessed customers changing their buying habits as the cost of living crisis starts to take effect.

Industry veteran Susanne Given told the PA news agency that shoppers have “held back” their spending recently due to concerns over inflation and the conflict in Ukraine.

She said the retailer is prioritising growing its market share this year amid predictions that overall retail sales will decline as people prioritise energy bills and other essential spending.

“The customer has definitely held back in the short term financially,” the retail boss said. “The macroeconomic backdrop means that, however big a customer’s budget, they are thinking about spending.

“It’s our view that we now focus on continuing to take market share because customers are definitely pulling back, but we’ve steadily built momentum against competitors so are in a great position whatever the environment.”

Data from the Office for National Statistics (ONS) revealed that surging furniture prices helped to drive UK consumer price inflation to a 30-year high of 7 per cent in March. Furniture and furnishing prices jumped by 16.8 per cent compared with the same month last year.

Ms Given said the online retailer has had to increase prices recently, saying that all retailers in the industry have had to pass on some of the impact of hefty shipping, commodity and labour costs to customers.

The former Superdry and TK Maxx executive, who spoke during the World Retail Congress event, said that she expects the luxury sector to face challenges over the coming months.

She said: “I think this market will mean there will be a heightened demand for what customers see as better value products.

“There isn’t a business around, in furnishing or elsewhere, that won’t have had to reassess their pricing this year, and it means there is always potential people will start pricing down.”

The rise in the cost of living crisis caused a significant drop in retail sales last month as consumer confidence sank to its lowest level since the 2008 financial crisis.

The BRC-KPMG retail sales monitor showed that like-for-like sales were down 0.4 per cent against the same month last year. The data also revealed that total sales increased by 3.1 per cent in March, slipping back from a 6.7 per cent rise in February. However, experts have said this growth in total sales in March reflected the higher prices across the sector.