Brexit: a surprising outcome

Professor Frank Peck of the University of Cumbria’s Centre for Regional Economic Development writes for in-Cumbria on the big issues of the day and the economic data behind them. This month, Brexit and the British consumer: recent trends in retailing. Post Brexit, those who analyse trends across the UK await new data on various economic indicators with much more interest than usual. During August, the Office for National Statistics (ONS) published data for retail sales in July . How would the Brexit vote affect consumer confidence? The findings came as a pleasant surprise for many: In July 2016, volume of retail sales increased by 5.9% compared with July 2015. Compared with the previous month (June), the volume of retail sales increased by 1.4% in July. The amount spent has also increased by 3.6% compared with July 2015 and by 1.6% compared with June 2016. The growth has occurred in all market segments with the main contribution coming from non-food stores. The amount spent on-line increased by 16.7 per cent compared with July 2015. On-line sales now accounts for 14.2 per cent of total retail sales by value. Industry commentators have debated the underlying causes of this unexpected outcome. A fall in the value of the pound perhaps contributed by encouraging spending from overseas holidaymakers in the UK – it was a good month, apparently, for sales of watches and jewellery (up by 16.6 per cent). There is much discounting at the moment in the retail sector which perhaps has affected sales volumes. But sales values have also increased indicating that consumers are spending more, not just buying more.