46% of retailers expect drop in consumer spending in next 12 months
A new study from Worldpay reveals widespread uncertainty about trading conditions across the retail sector.The payments processor claims retailers that delay investments in their business in the wake of the Brexit vote could be putting their long-term prospects at risk warns Worldpay.
Despite buoyant economic data from across the retail sector, just under half (46%) of UK retailers surveyed still believe there will be a drop in consumer spending over the coming year, versus 26% who believe trading conditions will remain unchanged with 27% remaining undecided.
Retailers in London were more than twice as likely to believe conditions will become more challenging in the coming twelve months than those across the rest of the UK. This stark contrast in attitude suggests voter preference could be influencing business behaviour as much as available data.
Worldpay warns uncertainty over how Brexit will impact trading conditions is causing many retailers to delay vital investment needed to modernise the sector and meet rapidly evolving consumer shopping habits.
Nearly half (44%) of UK retailers say the outcome of the Brexit vote has led them to reconsider planned investments in new technologies and channels to market, something which Worldpay believes could limit retailers’ ability to grow if left unchecked. Dave Hobday, UK managing director, Worldpay said: “Whilst it’s too early to tell what the long term effects of Brexit will be, the fundamental principle of retail will remain the same – focus on the customer. The businesses that will thrive in the post-vote environment will not be those that batten down the hatches, but those that invest and innovate to deliver the type of technology driven experience and service their customers are demanding.”
According to Worldpay’s research, businesses selling through online channels were far more confident about post-Brexit trading conditions than those with only a bricks and mortar presence, suggesting that recent interest from overseas shoppers taking advantage of currency fluctuations and boosted online spending from non-UK cards, which increased by 5.3% in the month following Brexit, have served to reassure web based retailers.
Hobday continued: “Recent high street data suggests the UK retail economy remains buoyant following the Brexit vote, and there are clear opportunities for businesses to thrive in post-referendum environment. In particular, multi-channel strategies which allow retailers to broaden their customer base and appeal to non-UK shoppers will enable businesses to capitalise fully on the current competitiveness of UK products internationally.”