Over half of UK retailers still have no Brexit plan
Written by Peter Walker
Despite three years passing since the European Union membership referendum, over half (57 per cent) of British retailers still have no plans in place for Brexit.
This is according to a survey of 200 British retail decision-makers carried out by Censuswide and commissioned by cross-border e-commerce solutions provider Global-e.
Since the 2016 referendum, a third of retailers have experienced a fall in sales. This, coupled with ongoing uncertainty, has left just over half (54 per cent) of retailers surveyed with a range of Brexit concerns.
Fractionally less than half of retailers (49 per cent) anticipate a collapse in consumer confidence in the UK post-Brexit, 43 per cent anticipate difficulty in sourcing products or goods and 34 per cent will even consider rationing in the event of stock shortages. Regardless of the outcome, 43 per cent of UK retailers said they will have to raise prices post-Brexit.
Overall, 52 per cent of retailers are concerned that their business will be impacted negatively by currency fluctuations post-Brexit. So far, many retailers that sell cross-border have benefited from a weak pound that makes UK products more appealing to shoppers overseas, but the weaker the pound, the more expensive imported raw materials will be.
However, 39 per cent of the retailers surveyed anticipate a decrease in sales to the European Economic Area (EEA) after Brexit and over half stated that they don’t know the tariffs that their EEA consumers will have to pay after UK leaves the EU, suggesting that the attractive prices created by the weak pound may be offset by additional duties and taxes.
Despite wider concerns around companies moving operations abroad, over 70 per cent of retailers have no plans to move all or part of their business to an EU country. However, 22 per cent are considering this option and two per cent have already moved their business. When it comes to international growth planning, 55 per cent of retailers have not changed their international operations and strategy since the vote, and only 18 per cent have invested more in growing their business outside the UK.
The government’s delayed Brexit date of 31 October poses a significant risk to retail performance over the fourth quarter, with 38 per cent of respondents stating that online trading will be affected, and larger retailers (over 250 employees) voicing greater concern (56 per cent) than small businesses (34 per cent).
However, of the 67 per cent of retailers that sell online to shoppers internationally, 38 per cent have seen an increase in cross-border e-commerce sales. Whilst 58 per cent of these retailers accept that selling to shoppers internationally will become more complex, 57 per cent of retailers overall are confident that their business can flourish internationally after Brexit.
Nir Debbi, co-founder of Global-e, noted that the new Brexit deadline unfortunately falls right before peak trading – a vital time in the year for the sector, adding an additional layer of concern. “However, our survey shows that retailers that sell internationally have actually experienced an increase in sales, defying the Brexit gloom and showing that the wider industry is confident when it comes to international growth.”