Impact of Brexit has yet to damage the high street but retailers must be prepared for if or when it does
Retail figures from July show the warmer weather helped consumers spend more in comparison with last year, despite concerns over spending following Brexit. Figures from the British Retail Consortium (BRC) and KPMG show a jump in sales of 1.9 per cent, despite overall consumer spending dropping by 1 per cent. The long term impact of Brexit is yet to be seen, but in the first full month from the referendum, consumers are still out there spending money.
“The initial doom and gloom of Britain’s decision to leave to EU was felt within the political and economic worlds, but so far, consumers have seen little impact. Global retailers have yet to put up their prices, summers sales are still going on and the warm weather seen in July all led to consumers spending more compared with last year”, says Andy Burton, CEO, Tryzens. “With holidays to the continent proving more expensive because of the weak sterling, Britons are choosing to holiday at home and foreign tourists are flocking to our cities, both serving to increase sales figures.”
“Increasingly consumers are turning to technology to research and buy items, with an average weekly spend online of £963.8 million in May”
“The strong consumer confidence is not only a boost to the economy, but also to retailers who must now be on top of their game to entice ‘staycation’ Brits and holiday makers from abroad. With overall shop prices seeing a deflation of 1.6 per cent, retailers are cutting prices or increasing promotional activity to help draw in the crowds. Increasingly consumers are turning to technology to research and buy items, with an average weekly spend online of £963.8 million in May,” continued Burton.
The report however was not all positive with a 50 per cent decrease in consumers’ confidence in their ability to spend on non-essential items. Little material impact has been felt by most households in the aftermath of Brexit but that has not stopped many from beginning to tighten their purse strings in anticipation of economic downturn. In addition, there is growing coverage that larger capital spending, most notably around home purchases and moves, are feeling a negative impact as people remain uncertain on the wider risk of property price trends, again however, this has not impacted on discretionary spending as yet.
“With the potential for downturn, retailers will naturally be looking to ensure their offering is attractive, their customer experience positive and their online service watertight in order to keep consumers happy, loyal and engaged. Retailers must leverage all of the analytics available to them via their online retail sites in order to make informed and targeted improvements that benefit consumer engagement and drive overall financial returns. For example, there is increasing evidence that sites with richer content and who have personalisation techniques deployed perform better by encouraging more frequent repeat visits and purchases, higher value purchases and increased basket sizes.” concluded Andy.