Brexit and the Impact on Retail - Thematic Research

This report provides a comprehensive overview of the UK's proposed departure from the European Union and the subsequent impact on retail. It covers macroeconomic and retail market modelling using different scenarios of the Brexit negotiations; analysis of how immigration, the Irish border and changes to tariffs will effect retail markets; and sector analysis of the individual retail markets. The report goes on to discuss the impact of Brexit on leading retailers, and provides consumer survey data on sentiments around the expected impact of Brexit on personal finances and shopping habits.

Scope

The outcome of Brexit will have a varied effect on different parts of the retail market. Inflation will drive up food prices and increase the value of the food market, particularly in categories such as dairy, meat, vegetables and fruit.

As consumers dedicate greater spend to food and grocery, together with falling consumer confidence, non-essential non-food categories such as furniture, homewares and electricals will suffer as volumes fall.

Key Highlights

The retail food market will grow faster in a hard Brexit scenario than in a withdrawal agreement or no Brexit outcome, with growth 0.7% higher by Q4 2020

Non-food will suffer as consumer sentiment sees volumes decline, reaching a low of 0.0% growth in Q3 2019 in the event of a hard Brexit

The largest UK ports, including Dover, the Channel tunnel and Holyhead, will be affected in different ways and individual ports will need to reduce the risk of congestion

The clothing industry has a greater immunity to Brexit uncertainty, given its higher reliance on non-EU countries for imports such as China, Bangladesh and India.

Consumer confidence remains negative, with continued month-on-month increases number of survey respondents expecting both the economy and their personal finances to get worse over the next six months.

Reasons to buy

Learn how macroeconomic fluctuations will effect the retail market in different Brexit scenarios, better preparing your business to cope with pressures in 2019 and 2020

Explore GlobalData's quarterly forecasts to the end of 2020 in the food and non-food retail markets, so you can see how the two will interact and to what extend inflation will offset falling volumes in total retail

Delve into the hot issues around Brexit, including immigration, ports, borders and the Irish backstop, enabling you to view the bigger picture of how trade will be impacted by changes post-Brexit

Read detailed analysis of individual retail markets, so you can alter sales mixes to minimise expected negative impact

View historic and current consumer sentiment around key Brexit topics such as personal finances and retail spend, giving you a greater view of how consumers will behave as the UK approaches March 2019.

Companies mentioned

Amazon

ASOS

B&M

B&Q

Boots

Carpetright

Dixons Carphone

Dunelm

IKEA

John Lewis & Partners

Morrisons

Next

Poundland

Primark

Sainsbury's

Screwfix

ScS

Shop Direct

Tesco

Amazon

ASOS

B&M

B&Q

Boots

Carpetright

Dixons Carphone

Dunelm

IKEA

John Lewis & Partners

Morrisons

Next

Poundland

Primark

Sainsbury's

Screwfix

ScS

Shop Direct

Tesco

Table of Contents

Headlines

Timeline

Scenarios

Withdrawal Agreement/Soft Brexit

No-deal/Hard Brexit

Delayed Brexit/No Brexit/Second Referendum

Macroeconomic Modelling

Overview

GDP

Inflation

Interest Rates

Unemployment

Housing ...

Headlines

Timeline

Scenarios

Withdrawal Agreement/Soft Brexit

No-deal/Hard Brexit

Delayed Brexit/No Brexit/Second Referendum

Macroeconomic Modelling

Overview

GDP

Inflation

Interest Rates

Unemployment

Housing

The Impact on Retail

Scenario Modelling

The Hot Topics

Immigration

Ports and borders

The Irish border

The Cost of Trade

Currencies

Imports, Exports and Tariffs

Retail Sector Analysis

Food & grocery

Clothing & footwear

Homewares

Health & beauty

Electricals

DIY & gardening

Furniture & floorcoverings

Companies

Consumer Sentiment

The impact of Brexit on consumer sentiment

List of Figures

GDP growth under different Brexit scenarios (index 2016 Q2 GDP = 100)

CPI inflation (% annual change) under different Brexit scenarios

Unemployment under different Brexit scenarios

Total ...

GDP growth under different Brexit scenarios (index 2016 Q2 GDP = 100)

CPI inflation (% annual change) under different Brexit scenarios

Unemployment under different Brexit scenarios

Total retail quarterly growth under different Brexit scenarios

Food retail quarterly growth under different Brexit scenarios

"Non-food retail quarterly growth under different Brexit scenarios"

Migration in the UK between March 2009-18

Proportion (%) of retailers employing EU nationals by skill level

Share of EU Nationals in the retail workforce

Image showing traffic at select UK ports (Number of lorries 2015)

Total imports and exports values for goods (excl. services, ONS)

Proportion (%) breakdown of UK exports to Ireland 2017

(%) change in UK exports to ROI under trade scenarios

Proportion (%) breakdown of UK imports from Ireland 2017

(%) change in UK exports to ROI under trade scenarios

(%) contribution to total food and livestock trade to Ireland (2017)

Monthly exchange rates for GBP against EUR, USD, and JPY

Historic performance against major currencies

Currencies against which the pound has performed the worst

Currencies against which the pound has performed the best

Next imports

Food & live animals: direct EU dependency imports (2017)

Top 10 countries by % contribution to UK food & live animal imports (2017)

Food % dependency on EU imports (2017) by import subsector

Beverages & tobacco: direct EU dependency imports (2017)

Top ten countries by % contribution to UK beverage & tobacco imports (2017)

Clothing & footwear: direct EU dependency imports (2017)

Top ten countries by % contribution to worldwide clothing & footwear imports (2017)

How do you expect the economy to change over the next 6 months? (%)

How do you expect the economy to change over the next 6 months?

How do you expect your own finances to change over the next 6 months? (%)

How do you expect your own finances to change over the next 6 months?

How will your household behave in terms of retail spending over the next 6 months? (%)

How do you expect your own finances to change over the next 6 months?

Negative expectations month-on-month ppts change

Britain is due to leave the EU at the end of March 2019. How do you feel leaving the EU will impact your personal finances?

Do you feel leaving the EU will result in a price increase of food & grocery purchases?

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