Consumers place Brexit as top concern as amid fears of retail downturn

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Brexit
// Consumers say Brexit is top concern for 2019
// The report by Natwest and Retail Economics surveyed 2000 people

Consumers have placed Brexit as their top concern for the year ahead amid fears it would leave a dent in annual retail sales.

Meanwhile, physical retail is expected to reach around 20 per cent overcapacity in the next decade.

According to a report by Natwest and Retail Economics, which surveyed 2,000 people, 48 per cent of consumers said Brexit was their biggest concern heading into 2019, followed by “a weaker economy” at 13 per cent and “lack of savings” at 12 per cent.

Thirty-five per cent of consumers reported they would spend less on experiences such as eating out, going to the cinema and bowling in 2019.

The report also revealed that 41 per cent of consumers were expecting their personal finances to weaken in the year ahead.

However, Natwest’s head of retail and leisure David Scott believes that by the end of the year, real wage growth will be up by 1.3 per cent and that the sector “has a real opportunity to succeed”.

The report also illustrates how tech-driven changes in consumer shopping behaviour has changed the retail industry, with over-capacity of physical stores in the UK market a key issue.

Online spending is forecast to reach 50 per cent in the next 10 years, leading to overcapacity of retail space of around 20 per cent.

“The rapid evolution of consumer preferences will leave many retailers struggling to adapt business models swiftly enough to meet heightened expectations throughout 2019,” Retail Economics chief executive Richard Lim said.

“The priority will be to focus on strategic transformation to pivot business models so they don’t get left behind in a digitally driven age.

“The ongoing channel shift to online presents a particular challenge to bricks and mortar business models as the performance of physical assets become increasingly polarised.

Scott added: “It is perhaps unsurprising that Brexit has been declared the top customer concern. Uncertainty always has and always will damage the sector.

“2018 was a year of unprecedented change in the retail industry, and this change propels uncertainty – there is nothing more uncertain than what Brexit will look like.”

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