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Retail Strong in UK Despite Brexit Vote

Oxford St

Brexit? British shoppers seem unconcerned by the predicted ramifications of the country’s decision to leave the European Union. Or they’re simply indulging in a little retail therapy. Either way, retail sales spiked in November, making it the strongest in 14 months.

High street sales rose 1.7 percent year on year in November, according to BDO, an accountancy and business advisory firm. Fashion, specifically, rose 1.5% as shoppers stocked up on cold weather gear.

The apparel and footwear sector also credited with boosting retail performance in October to a 1.9 percent increase in total sales volume over the previous month. Annual growth rose 7.4 percent—the strongest growth since April 2002.

While the numbers are encouraging, analysts warn this may very well be the honeymoon before the reality of Brexit sets in.

“Consumer spending may appear to be robust for now as many people are having a final shopping spree while the economy is exceeding growth expectations,” Sophie Michael, head of retail and wholesale at BDO, said. “[But] the challenges facing retailers continue to mount, which will inevitably impact on retailers’ costs and consumers’ disposable income and the question is ‘when’ not ‘if’ the spending squeeze will come.”

In the short term, the UK is enjoying the spoils of foreign travelers taking advantage of the weaker pound. In the long run, it’s speculated that inflation is on the horizon as stores pass on higher costs related to the depressed currency.

But not before the new year.

“In our estimates it will be the early part of the New Year that sees the majority of the price rises,” economist Jeremy Cook at World First told The Telegraph. “Retailers are some of the smartest companies out there and they know it would be suicide to hike prices now pre-Christmas.”

 

 

 

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