Brexit is unlikely to have an immediate significant impact on UK grocery, market experts have predicted.
Revealing its latest market share data today, which showed UK grocery has fallen into decline for the first time since January, Kantar Worldpanel said the impact of the EU referendum was too early to tell but precedent suggested grocery sales were unlikely to see a significant fall.
“The immediate economic uncertainty is unlikely to cause a substantial fall in grocery volumes, as demonstrated by the 2008 financial crisis when basic food, drinks and household sales proved resilient,” said Kantar Worldpanel head of retail and consumer insight Fraser McKevitt.
“With an estimated 40% of the food we consume sourced from overseas, any long term change in exchange rates may threaten the current period of cheaper groceries. Historically, higher prices have led to consumers looking for less expensive alternatives such as own-label products, seeking out brands on promotion or visiting cheaper retailers.”
Meanwhile, Nielsen – which also published its latest retail performance data today – said it did not expect Brexit to change shopper behaviour in the short term.
“Whilst the Brexit decision is unlikely to change shopper behaviour in the short term, we can expect some change in consumer sentiment and, possibly, a return to low inflation next year – should sterling’s depreciation continue and global commodity prices strengthen. However, for now, the battle for market share continues and shoppers will benefit from falling prices at food retailers due to price cuts and the deflationary environment,” said Mike Watkins, Nielsen’s UK head of retailer and business insight.
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