U.K. Retailers Are Being Hit Hard by Brexit Uncertainty
(Bloomberg) -- Retailers are bearing the brunt of the U.K.’s economic uncertainty as households pulled back from making big purchases, surveys published Tuesday indicated.
GfK’s headline consumer sentiment measure held at minus 13 for a third month in April, close to its lowest level since 2013. Business optimism among retailers also fell, a separate report by Lloyds showed.
While Britons were slightly more confident about the general economic situation over the next year, they became less optimistic about their own personal financial situation and said they were less likely to make major purchases, GfK said.
- GfK respondents also reported the biggest drop in motivation to save money since the Brexit referendum, suggesting household budgets may be under strain despite real wage increases in recent months
- The slide in the major purchases index “suggests more challenges in the near future at least for the retail sector,” said GfK Client Strategy Director Joe Staton
- Confidence among retailers also dipped this month, bucking a trend of rising sentiment across manufacturing, construction and services companies, the Lloyds report showed
- The banking group’s survey of 1,200 firms showed an overall increase in optimism, although it remains below long-term levels
- The Easter holiday failed to provide a boost for beleaguered department stores, which recorded their worst net retail sales reading this year, according to the Confederation of British Industry
- Embattled chain Debenhams last week announced plans to close as many as 22 stores next year and reduce rents on others in a bid to stay afloat
- Not all firms are feeling the malaise though. U.K. retail sales increased for a third consecutive month in March, bolstered by online shopping and groceries
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