Independent retailers expect to see a reduction in “spontaneous purchases”, following the removal of the £20 a week increase made to Universal Credit during the pandemic.
Prime minister Boris Johnson introduced the weekly increase to support struggling families at the start of the Covid-19 outbreak.
Deputy council leader of Manchester City Council, Bev Craig warned the reduction will hit residents’ ability to buy “essentials such as food and fuel”.
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One retailer, who wishes to remain anonymous told Better Retailing the change is likely to affect sales, but it will be “gradual”.
Located in a deprived area, he said: “I don’t think it will be an obvious difference, but the location of my store is in a low-income area, so I predict that a lot of the residents in my area may rely on universal credit.”
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“There is a chance that the decrease may eventually affect the sales of grocery and spending habits. I predict I may see a reduction in spontaneous purchases.”
Another anonymous retailer shared with Better Retailing that the uplift may cause problems in the future.
He said: “There are a lot of food banks in my area, with a lot of people heavily relying on them. That’s why this reduction is going to hit people in my area badly and I am concerned that it could affect spending habits in my store, it is something to keep an eye out for.”
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