Independent retailers in Lincoln are bracing for challenging months ahead as the UK economy has officially entered a recession.
Although the news did not come as a surprise, business owners throughout the city anticipate that customers will be aiming to save as much money as possible over the coming months.
On Thursday, the Office for National Statistics unveiled that gross domestic product (GDP) experienced a sharper-than-anticipated decline of 0.3% in the three months to December 2023. This was attributed to downturns across all major sectors of the economy and a significant drop in retail sales in the lead-up to Christmas.
This downturn comes after a 0.1% fall in GDP during the third quarter of 2023, marking a second consecutive quarter of reduced national output.
The director of economic statistics at the ONS, Liz McKeown, said: “While it has now shrunk for two consecutive quarters, across 2023 as a whole the economy has been broadly flat.
“All the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth, partially offset by increases in hotels and rentals of vehicles and machinery.”
Rob McGuire, owner of Gere Menswear | Photo: James Turner
In Lincoln city centre, Rob McGuire, owner of Gere Menswear, described it as “another wave to roll.” He added: “All this year and most of next year will definitely be tough.”
“It’s the unknown in everything. If everyone is uncertain, people reign it back. Even if they have money, they’re still cautious.”
Dave Hencke, owner of Yak Clothing, mentioned he “saw it coming.” Consequently, he has begun to implement cost-saving measures, such as reducing the number of storage spaces and adopting a more targeted approach to purchasing.
“We’re not being as brash with buying,” he stated. After experiencing a “shaky” winter, particularly with the cancellation of the Lincoln Christmas Market, he remains optimistic about an uptick in business during the spring, thanks to the prime location of his shop on The Strait.
Nevertheless, Dave still anticipates challenging times ahead for the economy. He concluded: “Going forward, I guess it’s going to be a tough two or three years. I’d say it’s probably going to get worse next year.”
Back to Mono owner Jim Penistan with some of his favourite records. | Photo: The Lincolnite
Back to Mono owner Jim Penistan also reported having a “quieter Christmas” : “There were busy Saturdays but they weren’t quite as busy as we thought they would be. I guess a lot of people are watching their money at the moment.”
Looking to the future, Jim remains hopeful that his loyal customers will keep purchasing his records. However, he acknowledges that more people will continue to be cautious with their spending, particularly due to the increase in utility bills.
He added: “I think people will be careful, especially with the news about energy bills possibly rising again. I think in our area of records, people still like to have their hobbies, so hopefully, people will still be buying.”
Carl Jacklin, owner of Agatha Boutique & Todd’s Menswear | Photo: James Turner
While he also admitted to experiencing a challenging autumn and winter season last year, Carl Jacklin, owner of Agatha Boutique & Todd’s Menswear, believes the recession will be “short-lived,” noting that he’s already had a stronger-than-expected January and February.
He said, “We had a good year up until about October and then we felt a decline.” However, he also shared that several businesses across the city have reported a strong first two months of the year during a Healthy High Street meeting on Wednesday.
However, he couldn’t pinpoint the cause, adding, “In all my 38 years of retail, it’s actually taken us by surprise,” while noting that business is usually quieter after Christmas.
Carl continued: “I don’t think we’ll be in a recession for long. If anything, I think we’ll bounce back in the next quarter – how big that will be is anybody’s guess.”
Following the announcement, Katrina Pierce, Development Manager for Lincolnshire at the Federation of Small Businesses (FSB), urged Chancellor of the Exchequer Jeremy Hunt to implement measures that would benefit small business owners in the upcoming budget.
“Waking up the news that the UK is officially in recession will have been an extremely dispiriting but not unsurprising experience for Lincolnshire’s independent business owners,” said Katrina.
“Confidence is already gloomy, especially in hospitality which is a golden industry here, so confirmation of what they already knew – that people are spending less and growth is limited – won’t make positive waves on that front.
“We need the Chancellor to take some seriously pro-small business actions at next month’s Budget to give our precious small businesses some vague reasons to be cheerful because they won’t be feeling that way today. They want and need to grow, but recession will make that extremely challenging.”
