Brexit and its aftermath are very much top of mind for UK companies this year. Retail is feeling the uncertainty as consumers remain circumspect about their discretionary spending and retailers face increasingly tighter margins.
“The British high street has come under threat in recent years from digital competition," said Bill Fisher, senior analyst at eMarketer and author of our recent report: "UK Ecommerce 2019: Click and Bricks Are Important for Retailers Grappling with Brexit Effects." "Allied with an often unhelpful real estate landscape and governmental hurdles yielding high rentals and business rates, the position for many physical retailers is proving untenable."
In an April 2019 press release, research from PwC and the Local Data Company indicated that 16 stores closed per day in the UK in 2018, as increasing cost of occupancy, shift to online and subdued consumer spending took their toll. The research went on to say that the gap between openings and closures had reached its highest level since the beginning of the decade. A record net 2,481 stores disappeared from the UK’s top 500 high streets in 2018.
Dampened consumer spending, largely a result of the uncertainty around Brexit, is having an impact. December 2018 had the largest ever like-for-like monthly drop in retail sales since 2010—a contraction of 0.7%, according to data from trade association British Retail Consortium and KPMG Retail Sales Monitor.