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”.
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.”
“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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