How will consumer spend change after Brexit?

Research by HIM reveals which categories will suffer most from belt tightening.

26 March 2019
Brexitfruitpricingstatisticsvegetables

  • Of the 1,000 shoppers HIM surveyed at the beginning of March, 43% believe that Brexit will affect their personal finances for the worse. That rises to 52% when looking specifically at the 25-35 age range.
  • 74% believe that food prices will increase after Brexit, with a quarter expecting food prices to increase substantially. Older shoppers are more likely to be worried about rising costs of food, as are particular regions such as Scotland (37% are expecting food prices to increase a lot).
  • Around 13% of consumers are planning to stock up on groceries. Of this group, 74% are stockpiling tinned and canned foods, while 52% are storing packaged grocery products like pasta and tea.
  • 1 in 4 Britons is planning to save money or cut expenses to prepare for Brexit. Good news: food and drink spend in retail is one of the last things to be cut compared to clothes (69% of those saving money are cutting back in this area), eating out of home (56%) and holidays/event tickets (50%). Bad news: a still enormous 43% want to cut down on their food shop.
  • That’s especially true for older shoppers: 55% of over 65s who are trying to save money have cut down on their grocery shop compared to just 37% of millennials. Regionally, Scotland and Northern Ireland are likely to spend less (62% and 67% respectively), while the East Midlands and London are less likely to make a change (25% and 28% respectively).
  • 16% of consumers plan to buy more British food and drink products – though only 11% have already begun implementing this behaviour.
  • Around 2 in 3 consumers expect prices of fresh fruit and veg to go up after the UK leaves the EU, but only 13% will spend less money on this category if that does happen. More people were likely to be dissuaded from buying alcohol (27% will spend less money on this if Brexit results in increased prices), confectionery (24%) and soft drinks (22%).
  • 75% of UK consumers think that stores will have emptier shelves and less choice than before Brexit. Almost exactly the same number (74%) think that online channels will have no reduction in choice and availability.
  • When it comes to pricing, the public has greater faith in the discounters being able to weather the Brexit storm. While 46% of consumers think discounters will increase the cost of groceries after the UK leaves Europe,  that’s significantly fewer than believe the same of supermarkets (68%), c-stores (60%) and even online retailers (53%).

 

“Unsurprisingly, shoppers are relatively pessimistic about the impact that Brexit will have on their finances. However, despite a general consensus that food prices will increase, shoppers are not planning on changing their grocery shopping habits. Other expenses, such as clothes, eating out and holidays are higher on the chopping block,” said Blonnie Walsh, Senior Insight Manager at HIM.

“While shoppers are not expecting to change their shopping habits as a result of Brexit, they are expecting there to be availability issues. As a consequence of low stock volumes in store, some shoppers believe they will be pushed to use online for their grocery needs. Those retailers that are currently operating online will be in a position to mitigate the impact of this perception. However, those reliant purely on store footfall face the challenge of managing and reassuring shoppers.”

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