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Analysis | Where Should Brits Invest Now? Think Jumpers and Duvets

It’s not just governments and energy companies worrying about keeping the lights on this winter. British consumers are hunkering down (and even ripping out their beloved gas-guzzling Aga cookers) for some hard months ahead.

Brits are wise to prepare for the worst. Although the government’s plan to cap energy bills takes some uncertainty out of households’ cost-of-living calculations, they now face the prospect of inflation lasting well into next year and more expensive borrowing costs, too.

On Thursday, Simon Wolfson, chief executive officer of Next Plc, warned of two cost-of-living crises: one from a squeeze on the supply of energy and raw materials this year, and another from the slump in sterling, which could drive up prices even further in 2023. 

Although the prospect of a freezing midwinter might boost sales of electric blankets now, customers may ultimately have less money to spend on the things they want. Add in Deutsche Bank’s warning that UK retailers face a “mortgage time bomb,” and it’s no wonder Next warned on profit after a slowdown in August, and Wolfson cautioned that he is much more worried about next year than the final months of 2022.

At the moment, consumers are preparing for darker nights and colder temperatures in a plethora of ways. Kingfisher Plc said sales of insulation at its B&Q DIY chain in the three weeks to Sept. 17 were up 82% from last year, and were 110% higher than 2019. The best-selling item is a roll of loft insulation to stop heat escaping through the roof, although products to stop draughts through windows and doors are also in demand.

Elsewhere, retailers report surging sales of cozy pajamas, dressing gowns and sweaters. This is partly linked to the weather. Recent chilly mornings could be driving demand for warmer jackets. It helps that quilted coats and gilets are on trend right now, too. But the level of buying indicates something else is going on — such as, for example, people stocking up on jumpers to wear indoors to avoid putting the heating on. 

At John Lewis, a £36 “blanket hoodie,” combining a knee-length fleecy sweatshirt with a hood, is one of the season’s best sellers. Last week alone, the department store doubled its sales of women’s dressing gowns, snuggly tops and onesies compared with last year. Meanwhile, in menswear, sales of thermal items are up threefold from 2021. It is a similar picture at Marks & Spencer Group Plc, which has seen its customers buy into the cozy trend in everything from loungewear to fashion.

Amid stubbornly higher food prices, Brits are also turning to cheap, filling meals, such as porridge and soup, to sustain them. Searches on the website of upmarket supermarket Waitrose for porridge are up 218% compared with 2019. Soup searches are up more than 100%. Whether porridge sales actually increase will be worth watching.

Another trend that may be indicative of consumer discomfort is demand for frozen food. Frozen sales by value rose 8.5% in the 12 weeks to Sept. 10, significantly outpacing sales of packaged food, which were 2.3% higher in the same period, according to NielsenIQ. Frozen meat and vegetables are often good value for money. Consumers can buy bigger, cheaper private-label packs that last as long as they need. 

Of course, hitting the freezer aisle may be less budget-friendly if we see blackouts this winter. But British consumers will have to weigh this type of risk against the more immediate need to economize.

More From Bloomberg Opinion:

• A Look at Who Might Succeed Jope as CEO at Unilever: Andrea Felsted

• Get Ready for the Great British Fire Sale: Chris Hughes

• Truss Can’t Neglect Tory MPs’ Jitters After Mini-Budget Jolt: Adrian Wooldridge

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times.

More stories like this are available on bloomberg.com/opinion

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