Consumers in the North West are bracing themselves for the impact of Brexit according to a new study.
KMPG commissioned a survey of 4,016 members of the public and found that 87% of the region’s respondents foresee some economic disruption.
More than half (53%) of people in the North West believe that a no-deal outcome is likely, whilst 31% have already cut their everyday spending and even more (42%) plan to do so in the future if a deal is not achieved.
In addition, 54% of the North West public think their Christmas shopping bill will go up if there is a no-deal Brexit and 56% said they will be more likely to ‘buy British’ during their weekly shop for the same reason.
Explaining the findings, Annette Barker, head of Brexit at KPMG in the North, says: “With negotiations going to the wire, the public is braced for a choppy Brexit.
“A majority continue to believe we’re heading for no deal, and even those who don’t still think economic disruption is on the cards.
“Consumers have long felt gloomy about Brexit, but now we’re seeing people in the region act on those emotions with around a third of the public reporting they’ve already cut their spending.
“Brexit is often presented as if it will happen at our ports and in the city. In reality, some of the biggest effects will be in our shops, cafés, travel agents and garage forecourts.
“More businesses need to prepare for turbulence and be ready to capitalise on any spike in consumer confidence a good deal unleashes.”
North West consumers say that they have already reduced their spending in the following areas because of Brexit: everyday items such as shopping travel and regular bills (31%), non-essential items such as entertainment and eating out (38%), luxury items such as designer clothes and holidays (41%) and major purchasing or investment decisions such as new cars, home extensions or moving house (40%).
In the event of a no-deal Brexit, consumers in the region believe the following supermarket categories are likely (or very likely) to become more expensive: wines and spirits (70%), fruit and veg’ (65%), fish and seafood (61%), meat products (60%), the ‘Christmas shop’ (54%) and everyday essentials (55%).
Sue Richardson, head of retail at KPMG in the North, adds: “Consumers are increasingly concerned about rising food prices, which are likely to be a reality if a no-deal Brexit occurs.
“People may want more British produce but supply naturally poses a challenge, especially as consumers have become accustomed to fresh produce all year round.
“The run-up to Christmas is a crucial time for consumer businesses, with some generating as much as 80% of their annual profit in these months alone.
“Consumer businesses must adapt to continue to attract discretionary spend, otherwise they’ll encounter a severe Christmas hangover.”