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Can we supply the coming consumer bounce-back?

Source: Other | | 09/02/2021

Will the Government’s endeavours to nail the COVID virus with the vaccine roll-out have the desired effect of opening up the UK economy, the easing of lock-down and a gradual return to “normality”?

Fingers crossed…

One thing is for sure, when the pubs can open, when we can start to book a holiday and when High Street restaurants, cafes and stores open for business, get ready for a consumer bonanza.

The pent-up desire to shop and spend by millions of UK residents will be difficult to reign back especially as personal savings have peaked during the pandemic. With money in the bank and a desire to re-engage with life as it used to be, the urge to spend and enjoy will be irresistible.

But what about the supply side?

UK retailers, publicans, hoteliers and entertainers will have to meet this onrush of demand stripped of capital and cashflow. Will they be able to meet this demand-side increase? If not, basic economic theory dictates that if demand increases and supply is (at least initially) restricted, then prices are going to rise.

Factor in the present slow down in imports and exports from and to the EU, and somewhat ironically, we may not be able to service the needs of consumers when restrictions are eased. Only time will tell.

 

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McAllisters is a partnership trading from Paxton House, 11 Woodside Crescent, Glasgow providing accountancy and tax services and general business advice and is a member of ICAS (Registration No 0342) and an FCA exempt professional firm (No 301235). Its VAT number is 261 3019 94

McAllisters (Scotland) Ltd is a related business providing tax and business advisory services to McAllisters and its clients. McAllisters (Scotland) Ltd is registered in Scotland (Registration number SC146856). Its VAT number is 624 0564 62.

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