What can retailers expect post Brexit?

London - After the FTSE 100 and share prices plummeted last week after the Brexit referendum, the question of what will happen to retailers, brands and online stores in the short and long term are key to understanding how to prepare for the repercussions.

Research and Markets, the world's largest research resource, published a Brexit Forecast report, where they tellingly predict that the second half of 2016 is where retail volume declines are likely to be noticed.

According to the report there will be product inflation, due both the change in value of the Sterling as well as from clothing imports from overseas. Trade barriers and tariffs might also be erected adding even more to consumer prices, all of which will have an effect on consumer demand.

The report also notes that a big question mark will be what will happen to the many EU citizens currently living and working in the UK. Perhaps stricter visa requirements for low paid EU staff in warehouses and factories may force many to emigrate. If this happens there will be many issues in the supply chain, but perhaps more importantly in terms of spend major concern is the fall in the number of shoppers. Further more, mass EU emigration and the loss of purchasing power on a greater scale could not be offset by retailers in the UK, the report stated.

The majority of British brands outsource their production to countries such as China, Portugal, Turkey, Italy and India, where they pay in either dollars or euros. A weaker pound means that they'll essentially be spending more on production, and those costs will likely be passed on to the consumer.

www.researchandmarkets.com
 

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