The Post Brexit impact on UK e-retailers
Now that the dust has settled and life is returning back to normal after the Brexit shockwave reverberated through the EU, how does the future look for e-retailers in the UK? In this blog post, I will share some relevant information for e-retailers on life after Brexit.
Retailing is an imperative part of Britain’s economy, responsible for 11% of output and 4.5 mn jobs in shops, e-commerce, and physical distribution. Since retail sales account for approximately 30% of household consumer spending in the UK, and household spending accounts for approximately 60% of GDP, this makes retail a significant barometer of the direction of the broader economy.
Declined sales not as bad as expected
Contrary to fears from retailers, Post Brexit retail sales in the United Kingdom declined less than what markets had earlier anticipated. This seems to indicate a favorable post-Brexit position as consumers appear to have discarded the country’s surprise decision to exit the European Union. Data released by the Office for National Statistics, according to Retail Gazette, showed UK’s retail sales fell 0.2 percent in August from July, a smaller decline than the 0.6 percent
fall expected. Sales were 6.2% higher than a year earlier, and July’s sales figures were revised higher from 1.4% to 1.9% – the best performance for the month in 14 years, according to The Globe and Mail. The ONS reported that all stores except textile, clothing and household goods saw an increase in volumes sold.
ING economist James Knightley said the figures offered further evidence that the UK was handling the short-term effects of the Brexit vote well. “Sterling’s fall is likely to have boosted sales of high-end items by foreign tourists as watches and fashions become relatively cheaper for them when bought in the UK versus elsewhere,” he added.
According to Marketwatch, shopping in the months ahead by locals and tourists alike will be critical to the health of the world’s fifth-largest economy.
What does the future look like for e-Retailers?
The Centre for Retail Research thinks the future largely depends on what politicians, businesses, and consumers do after Brexit r