Notting Hill Carnival Returns to London Amid High Consumer Costs, Record Inflation

This week and for the first time since 2019, Londoners gathered for the annual Notting Hill carnival, a street festival and celebration of the city’s Caribbean cultures that typically draws over a million people and contributes upwards of $100 million to the U.K. economy.

Behind all the floats, costumes, food and music, the logistics and trade that make the whole event possible stimulate an intensification of economic activity, which culminates on the last weekend of August.

According to Sadiq Khan, the Mayor of London, the “community-led celebration of Caribbean history and culture has become one of the world’s biggest street festivals and part of the very fabric of this city,” The Mirror reported.

But as Londoners and hundreds of thousands of visitors hit the streets of Notting Hill this year, they’re likely to notice some changes that have occurred in the last three years.

For starters, the steepest inflation the U.K. has seen for 40 years means that the carnival’s ubiquitous cans of Red Stripe will be more expensive than revelers remember. Heineken, the Dutch drinks giant that owns the Red Stripe brand, recently reported that it had applied 17% year-over-year price increases across its portfolio of brands in Europe.

See more: UK’s 10% Inflation Rates Stretch Consumers’ Paychecks and Patience

If the rising cost of beer doesn’t slow carnival-goers down, striking bus drivers may. A 48-hour bus strike has been taking place in parts of West London amid an ongoing dispute over pay. With inflation in the double digits, London’s public transport workers have been organizing strike action throughout August as they claim a 2-4% salary increase amounts to a cut in real wages.

Besides the burden on people’s wallets, Khan acknowledged the cost of living crisis has had a material effect on this year’s festivities. “We are seeing those who want to have floats, those who want to have sound systems, pulling out because they can’t afford to pay their bills,” he told reporters.

Street Vendors Turn to Contactless POS Solutions

While the macroeconomic climate may be frosty, Londoners enjoying the festivities can be thankful for one development in recent years — evolving payment norms among small businesses.

In London’s post-pandemic payments landscape, more street food vendors have been wielding mobile POS terminals than ever before.

As UK Finance reported recently, last year cash accounted for just 15% of transactions in the country and contactless payments are more popular than ever, a shift the trade group attributes in part to the continued roll-out of card acceptance devices among smaller businesses.

Related: Card Is King in UK Payments Landscape, but Digital Wallet Usage Soars

At an event that has suffered from long queues at ATMs in the past, the declining prevalence of cash in the U.K. economy will have many visitors to Notting Hill breathing a sigh of relief.

And with mobile POS terminals now a popular option for even the smallest commercial operations, the U.K.’s biggest players have been battling it out for a share of the SMB market.

More on this: Revolut Takes on Square, PayPal in UK With POS Reader

Just last month, Revolut marked its first foray into the POS solutions space with the launch of the Revolut Reader in the U.K. and Ireland, noting at the time that the lightweight card reader is “designed to allow merchants of all kinds to accept payments anywhere.”

Read on: UK SMEs Give Customers the Cheap, Contactless Payments They Want

Ben Ramsden, head of SME at PayPal, also chimed in an interview with PYMNTS, tying the spike in contactless payments to “people not wanting to necessarily handle cash so much” during the pandemic. These factors have informed PayPal’s POS strategy, which increasingly emphasizes convenient, mobile solutions for small businesses such as the recently launched Zettle “Tap to Pay” SoftPOS.

Related: SoftPOS Drives EU Merchants’ Adoption of Contactless Payments

So, amid record inflation and high consumer costs that could have potentially led to lower sales, there’s one thing street vendors at this year’s Notting Hill likely did not have to worry about — a plethora of options when it comes to accepting payments.

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