The general retailers have had mixed experiences over the course of the pandemic, and while things are looking brighter on the Covid-19 front, these companies now have to reckon with soaring inflation and consumers who are dealing with rocketing bills – meaning the outlook suddenly looks a bit shaky again. The largest annual fall in consumer confidence since the global financial crisis, as recorded by PwC's spring consumer sentiment survey, looms large.
On the other hand, cost-of-living pressures are forcing consumers to seek out better deals on common expenses. This is good news for price comparison companies such as Moneysupermarket.com (MONY), which announced an 8 per cent increase in revenue in its recent first-quarter trading update, driven by consumers seeking better borrowing deals – as well as close to pre-pandemic levels of travel insurance.
But there are arguments that say this is just masking longer-term decline for such companies due to regulatory pressures. The Financial Conduct Authority’s insurance reforms, which ban insurers from charging a higher renewal rate to current customers than to new ones, are already having an impact on the propensity to switch. There is also the energy crisis to contend with – nil energy revenue was recorded in the first quarter after suppliers withdrew tariffs from the market.