Walking A Tightrope: Retailers Grapple With Inflation, Debt And Dwindling Demand

The UK economy has been severely impacted in recent months by rising interest rates, spikes in energy prices and falling consumer demand which has resulted in a marked economic slowdown. In retail this has been exacerbated by labour shortages, geopolitical fallout from the Russian invasion of Ukraine and volatile exchange rates. Consequently, there is a looming risk of recession, with struggles being felt across the board and impacting retailers, suppliers, logistics and wholesalers.

Another challenge retailers face is the debt conundrum. Many businesses across Europe received Covid relief loans which are maturing, and companies will be refinancing into a very different environment. In addition, debt issuance has plummeted this year, and lenders are being more cautious in rolling over loans. As we approach Black Friday and Christmas, how can retailers survive in this period of volatility?