Facing what local reports are calling a “triple threat” retailers across the pond are reporting a distinct lack of enthusiasm for what is next to come.
Costs are going up as wages are being driven up by statute, consumers preferences are rapidly re-align and moving online – and now (to add to the adventure) an EU referendum about Britain’s future within it have driven uncertainty and rather darkened the outlook of retailers nationwide. Red tape and cyber crime also ranked on the list of things disturbing the U.K.’s merchant classes.
A study by PwC of 37 chief executives of supermarkets, fashion and home retailers employing nearly one million staff showed just 29 percent of respondents were confident about prospects for the UK retail and consumer sector over the next six months – where as 60 percent said they were optimistic over the next three years.
In contrast, 60pc said they were optimistic about the outlook over the next three years. The survey also demonstrated that 94 pec
Retailers in the U.K also noted that a vote to stay within the EU would have “the most positive impact on consumer confidence”. Record low interest rates and rising employment were also cited as positive factors.
But retail bosses were less solid on the importance of EU membership – while more than 50 percent ranked it is very important to their future plans, about 43 percent said they were “not at all dependent” on staying in the EU.
“It is apparent that retailers are wrestling with two major factors over the next 12 months, implementing the National Living Wage and adapting to changes in consumer demand, as customers change how they buy, what they buy and where they buy,” noted Madeleine Thomson, UK retail and consumer leader at PwC,
“It isn’t easy. At the same time as weathering economic and political uncertainties, and grappling with the outcome of the EU referendum, retailers have to keep up with emerging trends, anticipate consumer needs, and manage across a wide range of different channels.
And PwC isn’t the only firm bringing some tough numbers to the table. A different study by Lloyds demonstrated U.K. business confidence dropped in May – as the number of firms that said trading prospects had improved dropped way below the 50 percent mark to 38 percent. Eurozone economic sentiment – on the other hand – rose to a four-month high during he same period. .
“This shows that the eurozone expansion is currently led by domestic demand as employment is recovering,” said Bert Colijn, senior eurozone economist at ING.