THE UNITED KINGDOM, London. As high streets in the UK are re-opening, consumers who have been missing their favorite chains such as Starbucks and McDonald’s got the good news that many of these big players will be using the government’s VAT reduction scheme to pass on the savings to the consumer.
Consumers who are concerned about finances will be relieved that their favorite food and drinks will be discounted, but there is still an interest in supporting local independents as a result of COVID-19. According to a survey by GlobalData, 57% of UK consumers say they are extremely or quite concerned about their personal financial situation. Furthermore, 35% say that supporting local is more important than pre-COVID-19.
Yamina Tsalamlal, Associate Analyst at GlobalData, says, “While reopening with lower prices may provide a big incentive to shop at the big chains, the lockdown has renewed interest in small and independent businesses. While the big players closed shop, smaller businesses could be agile and reposition. As consumers stayed close to home, the local communities became more important. Plus, as it became clear how small businesses’ survival is often on thin ice, consumers wanted to support them. ”
She added: “While local shops might not be able to afford to pass the VAT savings on to consumers, this reinvigorated commitment to staying local means that consumers will still be willing to spend a bit more. The lockdown has changed consumer behavior - whether it is cooking more meals from home, buying groceries online instead of in-store, or ordering takeaway from neighborhood restaurants. Independents have taken advantage by engaging meaningfully with their communities and encouraging support by quickly pivoting and re-organizing their business models quicker than big chains could. The appeal of that first Big Mac will be high, but in the long-term, consumers have gained an appreciation of the businesses in their communities and, if financially feasible, they will continue to support them.”