We are witnessing the death of spendthrift Britain

The company has gone from forecasting profits of up to £15m for 2022 to warning it could be £50-70m in the red by the end of the year – a potential swing of over £100m in the space of a few months. . This is hugely significant for a company now worth just £83million.

Investors have every right to be furious and wonder how those at the top repeatedly got their numbers wrong.

Yet this time, management can at least claim to be fighting forces beyond its control – “volatile” trade and “deteriorating consumer confidence” according to boss Nicola Thompson, words that will heighten fears of a impending recession.

The current tightening marks the end of a decade of gratuitous spending supported by low interest rates and cheap prices, subsidized by venture capital and globalization. These factors are now reversing.

One of the most notable features of the post-pandemic era is the lack of business losses despite a host of headwinds: supply chain chaos, energy shock, soaring inflation and resulting compression of household incomes.

Businesses that have been buoyed by Treasury support during the crisis have been able to keep their heads above water while the near-record savings accumulated during the lockdown have allowed consumers to spend.

But after the sugar rush comes the crash and in recent days the number of companies warning of the outlook has steadily increased as consumer demand finally wanes.

On the high street, grocery sales are at their lowest in four years and customers are resorting to drastic measures such as asking cashiers to stop scanning when the bill hits £30; refrigerator website AO World, clothing chain Ted Baker and womenswear specialist Joules are all struggling with cash flow crises; Curry’s cut growth targets; and Wetherspoons warned of bigger-than-expected annual losses after a slump in beer and cider sales.

There are also signs of trouble at Hotel Chocolat. A warning from chief executive Angus Thirlwell that the posh chocolate maker expects “temporary weaker sales growth” halved its share price on Thursday.

In the virtual world, Deliveroo and Ocado recently lowered their profit forecasts, while fashion site Missguided crashed into administration last month.

The pattern is familiar. It is always the so-called “expensive” items that are sacrificed first: sofas, televisions and cars. Then anything considered indulgent, like high-end fashion, posh hotel stays, and expensive food, followed by what economists like to call “discretionary spending.”

These are streaming services, grocery deliveries, takeout, eventually followed by vacations, dining out and family outings until average household income is largely eaten up by rent. or mortgage payments, energy bills, the weekly store and little else.

Opinions are still divided on whether the highest inflation for four decades will tip Britain into a recession. In its attacks on the government’s record, Labor has repeatedly cited an OECD report that ranks Britain as the weakest industrialized economy, excluding Russia.

The Bank of England believes the crisis will come in the autumn when the next energy price cap kicks in, adding hundreds more pounds to the average bill. Higher interest rates will also start to really bite later in the year.