Despite three years passing since the EU referendum, over half (57%) of British retailers still have no plans in place for Brexit, according to a new survey.
The poll of 200 British retail decision-makers by Global-e in conjunction with Censuswide, found that since the 2016 referendum, a third (33%) of retailers have experienced a fall in sales.
This, coupled with ongoing uncertainty, has left over half (54%) of retailers surveyed with a range of Brexit concerns. Half of retailers (49%) anticipate a collapse in consumer confidence in the UK post-Brexit, 43% anticipate difficulty in sourcing products or goods and over a third (34%) will even consider rationing in the event of stock shortages. Regardless of the outcome, 43%of UK retailers say they will have to raise prices post-Brexit.
Key findings:
• 58% of retail decision makers believe cross-border trading will become more complex once Britain leaves the EU.
• A third of retailers have experienced a fall in sales in the UK since the referendum and nearly half (43%) prepare to raise prices for consumers.
• Over a third (38%) of retailers see the delayed Brexit date of October 31st directly impacting Christmas trading online.
Overall, 52% 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% of the retailers surveyed anticipate a decrease in sales to the European Economic Area (EEA) after Brexit and over 50% 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% of retailers have no plans to move all or part of their business to an EU country. However, a significant 22% are considering this option and 2% have already moved their business. When it comes to international growth planning, 55% of retailers have not changed their international operations and strategy since the 2016 referendum, and only 18% have invested more in growing their business outside the UK.
With the ‘Christmas in July’ period approaching, retailers are starting to focus on planning for the festive season. Peak retail trading takes place in November and December, with Black Friday, Cyber Monday and Christmas Day and Boxing Day as key trading periods. The government’s delayed Brexit date of 31st October poses a significant risk to retail performance over the fourth quarter, with well over a third of retailers surveyed (38%) of the opinion that online trading will be affected by this untimely departure, with larger retailers (over 250 employees) voicing greater concern (56%) than SMEs (34%).
However, of the 67% of retailers that sell online to shoppers internationally, 38% have seen an increase in cross-border ecommerce sales. Whilst 58% of these retailers accept that selling to shoppers internationally will become more complex, 3 in 5 (57%) retailers overall are confident that their business can flourish internationally after Brexit.
Nir Debbi, Co-Founder and CMO of Global-e, said: “While many British retailers still have no formal Brexit plans in place, our survey shows that retail leaders are acutely aware of the issues their businesses face in the wake of Britain leaving the EU. The government has set a formal date for Britain’s exit, which 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.
The data shows that whilst nearly 90% of larger organisations are embracing cross-border ecommerce, a third of SMEs aren’t and a quarter of them have no plans to. However, cross-border trading isn’t just an opportunity that only large retailers can capitalise on. Tailoring the online experience to cater for cross-border selling can be a simple, quick process that can open up new routes to growth for retailers of all sizes during these challenging times.
Retailers don’t need to move abroad to sell abroad, and whatever happens come October, there is huge potential for UK retailers to grow their brand globally and continue selling to the EU by adjusting their online offering to offer a seamless, localised experience for EU consumers in addition to customers in other markets around the world.”
Source: Global-e