Players in international markets will feel the aftershocks of the UK’s split from Europe
In June, the UK voted to leave the EU, a decision that—if it holds—will have massive ramifications on both Continental and UK economies. Marketers may be optimistic, especially digital marketers, having proved the resilience of the industry through the recent recession (PRO subscribers only). But consumer goods firms, among others, may be facing difficulties.
Kantar Retail broke out estimates of where fast-moving consumer goods (FMCG) retailers with stores in the UK make their money, and where they are headquartered—which could have a major effect on their future operations if their access to the common market of the EU, or the market of the UK, changes post-Brexit.
UK-based retailers like Sainsbury’s, Morrisons and John Lewis make all or virtually all of their revenue in the UK, insulating them from at least some of the shocks of Brexit. They are less likely to feel the pain if trade restrictions come into play than some competitors.
Tesco, for example, makes 15% of its revenue in the EU (excluding the UK), meaning that pain might be far more substantial.
Their EU and foreign counterparts—think Aldi and Amazon—meanwhile, might miss out on some of the approximately 10% of UK revenues they currently enjoy.
The Internet Advertising Bureau UK (IAB UK) and PricewaterhouseCoopers (PwC) reported in April 2016 that 18% of digital display ad spending came from consumer goods brands, more than any other industry. So problems for retailers could trickle down to become problems for marketers—and, in turn, publishers.
And Brexit doesn’t just change UK and EU markets: It changes the world. For example, US marketing executives often cited Western Europe as their largest international sales market, according to Duke University’s Fuqua School of Business. This includes the tech industry, healthcare and pharmaceuticals, and, overwhelmingly, banking, finance and insurance. Brexit could fragment that market.