According to data from the CBI, retail sales volumes grew at their best levels for six months in August1. This follows above-forecast July retail sales number from the Office for National Statistics2. Yet despite buoyant economic data from across the retail sector, just under half (46%) of UK retailers surveyed still believe there will be a drop in consumer spending over the coming year, versus 26% who believe trading conditions will remain unchanged with 27% remaining undecided.
Retailers in London were more than twice as likely to believe conditions will become more challenging in the coming twelve months than those across the rest of the UK. This stark contrast in attitude suggests voter preference could be influencing business behaviour as much as available data.
Worldpay warns uncertainty over how Brexit will impact trading conditions is causing many retailers to delay vital investment needed to modernise the sector and meet rapidly evolving consumer shopping habits.
Nearly half (44%) of UK retailers say the outcome of the Brexit vote has led them to reconsider planned investments in new technologies and channels to market, something which Worldpay believes could limit retailers’ ability to grow if left unchecked.
Dave Hobday, UK Managing Director, Worldpay said: “Whilst it’s too early to tell what the long term effects of Brexit will be, the fundamental principle of retail will remain the same – focus on the customer. The businesses that will thrive in the post-vote environment will not be those that batten down the hatches, but those that invest and innovate to deliver the type of technology driven experience and service their customers are demanding.”
According to Worldpay’s research, businesses selling through online channels were far more confident about post-Brexit trading conditions than those with only a bricks and mortar presence, suggesting that recent interest from overseas shoppers taking advantage of currency fluctuations and boosted online spending from non-UK cards, which increased by 5.3%3 in the month following Brexit, have served to reassure web based retailers.
Hobday continued: “Recent high street data suggests the UK retail economy remains buoyant following the Brexit vote, and there are clear opportunities for businesses to thrive in post-referendum environment. In particular, multi-channel strategies which allow retailers to broaden their customer base and appeal to non-UK shoppers will enable businesses to capitalise fully on the current competitiveness of UK products internationally.”
Notes to editors:
About the research:
Survey of 500 UK retailers conducted by Toluna, on behalf of Worldpay. Fieldwork was conducted between 12th and 18th August. The survey was conducted online.
Worldpay is a leading payments company with global reach. We provide an extensive range of technology-led payment products and services to over 400,000 customers, enabling their businesses to grow and prosper. We manage the increasing complexity of the payments landscape for our customers, allowing them to accept the widest range of payment types around the world. Using our network and technology, we are able to process payments from geographies covering 99% of global GDP, across 146 countries and 126 currencies. We help our customers to accept more than 300 different payment types.
Worldpay UK has a 42% market share in the UK and helps businesses of all sizes sell more to their customers by accepting card payments in-store, online, via mail or telephone, and on the move.
For more information please contact:
Suraj Mashru, Golin: T: +44(0)20 7067 0494
Siobhan Acha Derrington, Worldpay: T: +44 (0)203 664 4822
1CBI August Retail Survey
2ONS Retail July 2016
3 Analysis of non-UK card transactions processed by Worldpay among UK based online retailers. Percentages have been calculated on the basis of comparison between the rate of year on year growth in the month prior to the referendum (27th May – 23rd June) and the rate of year on year growth in the month post the referendum (24th June - 21st July).