UK retailers pessimistic about future prospects as Brexit effects loom

By

Barbara Santamaria

Published
May 22, 2017

British retailers have become significantly more pessimistic about the prospects for the sector due to Brexit and consumer confidence worries, a new survey has revealed.

The proportion of retailers expecting a difficult year ahead has increased by 33% to 40%, reports The Times based on a new survey carried out by Korn Ferry Institute.

The biggest concerns include the outcome of the general election on 8 June, as well as the country’s economic prospects following the Brexit vote last year. Additionally, many retailers are worried about the shaky consumer confidence, rising inflation and the uncertainty surrounding employers’ access to EU migrant workers.

Sir Ian Cheshire, chairman of Debenhams, told the newspaper: “This is a pretty challenging environment. The foreign exchange impact on margins and the wider inflationary environment will all have an impact on consumer spending; more pressure on household budgets means less discretionary spend.

“There are some key structural challenges in the sector at present. I see more distressed sales likely and further shake-out to come.”

Despite the dark forecast for the sector, the survey also revealed that retailers are optimistic about their financial performance with 70% expecting their business to grow this year and 15% predicting “significant growth”.