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Remaining resilient with high inflation
The British Retail Consortium (BRC), the trade association for UK retail businesses, research shows that shop price annual inflation accelerated to 9.0% at the start of May, up slightly from 8.8% in April. This is above the 3-month average rate of 8.9%. This brings shop price growth to a new high, although it is now beginning to fall.
Source: Food inflation eased in May (brc.org.uk)
The Office for National Statistics (ONS) April report shows that food and non-alcoholic beverage prices saw a monthly increase of 1.4% compared with a rise of 1.5% in the equivalent time period last year and an annual rise of 19.1% in April 2023 compared with an annual rise of 19.2% in March 2023. ONS modelling suggests that the annual rate for this category in April 2023 is the second highest seen for over 45 years, when the rate in August 1977 was estimated to be 21.9%.
Source: Consumer price inflation, UK - Office for National Statistics
Will this pattern continue?
Conditions are likely to remain challenging for many businesses and individuals alike. So now is a good time to focus on resilience.
Resilience is the process of adapting well in the face of adversity, trauma, tragedy, threats, or significant sources of stress — such as business, workplace, and financial stressors. It means "bouncing back" from difficult experiences.
So, what actions can you take now to remain resilient?
Here are a few suggestions to help you think about your business:
- Review your Budgets and set realistic and achievable targets for the rest of 2023.
- Be careful with ‘can’t pay’ customers and get rid of ‘won’t pay’ customers.
- Review your debtors list and chase up overdue invoices (if appropriate).
- Offer existing debtors extended payment terms and/or discounts (if applicable).
- Make sure your terms of business contain explicit payment terms.
- Assign responsibility to one individual for invoicing and collections.
- Put extra effort into making sure your relationships with your better customers are solid.
- Review your list of products and services and eliminate those that are unprofitable or not core products/services.
The important thing to remember in uncertain economic times is that the vast majority of people will not lose their jobs, the majority of businesses won’t fail, and eventually, we’ll recover. (NatWest Bank, Key economic predictions for 2023).
Talk to us about your business, we have many clients who have changed the way they do things and some really innovative stories to share with you!