Public tightening purse strings and planning to buy British ahead of squeezed Christmas
A survey of 4,015 members of the British public commissioned by KPMG shows that 53% believe that a no deal outcome is likely, 89% foresee some economic disruption, 31% have already cut their everyday spending and even more (41%) plan to do so in the future if a deal is not achieved. In addition, 53% of the public think their Christmas shopping bill will go up this year because of Brexit whilst 54% said they will be more likely to ‘buy British’ during their weekly shop as a result of Brexit.
Explaining the findings James Stewart, Head of Brexit at KPMG UK said:
“With negotiations going to the wire, the public are 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 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 felt in our shops, cafés, travel agents and garage forecourts. More businesses need to prepare for turbulence and also be ready to capitalise on any spike in consumer confidence a good deal unleashes.”
UK consumers say that they have already reduced their spending in the following areas because of Brexit: spending on everyday items such as shopping travel and regular bills (31%), non-essential items such as entertainment and eating out (34%), luxury items such as designer clothes and holidays (38%), major purchasing or investment decisions such as new cars home extensions or moving house (38%).
In the event of No Deal consumers believe the following supermarket categories are likely (or very likely) to become more expensive: Wine spirits and steak (65%), fruit and veg’ (62%), fish and seafood (58%), meat products (56%), the Christmas shop (53%), and everyday essentials (53%).
In the event of a No Deal Brexit UK consumers said they were likely or very likely to cut spending in the following areas: Buying a new car (58%), designer goods and jewellery (43%), travelling and holidays (41%), eating out (41%), home technology (39%), home improvements (39%), leisure activities (38%), clothing (38%), and household appliances (38%).
Paul Martin, UK Head of Retail at KPMG UK, said:
“Consumers are increasingly concerned about rising food prices, which are likely to become 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. As our monthly BRC-KPMG retail sales monitor has highlighted, retail price increases result in consumers clawing back on non-food items, especially bigger ticket discretionary items such as cars, kitchens or furniture, to accommodate for essentials like food until the longer-term picture becomes clearer.”
Linda Ellett, UK Head of Consumer Markets at KPMG UK, added:
“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. Nearly a third of consumers said that they’ve already cut their everyday spend; even more are spending less on luxury items, and over half anticipate higher prices if a no deal Brexit becomes a reality, so a lean Christmas could lie ahead. Consumer businesses must adapt to continue to attract spending consumers, otherwise they’ll encounter a severe Christmas hangover.”
The UK population continue to believe that leaving the EU without a deal will be bad for the UK – 45% think it will be bad for the country and 23% think it will be good for the country (45% and 25% in August). However Brits believe Brexit will have a more positive effect on the UK economy in the longer term: 22% think Brexit will be positive in the weeks after exit, 33% think Brexit will be positive in the year after the UK leaves, and 47% think Brexit will be positive 5-10 years after the UK leaves. This compares with 18%, 30% and 45% respectively in KPMG’s August poll.
Notes to editors:
Detailed findings from KPMG’s poll:
· Since August consumers have become considerably (+29% relative change) more concerned about potential medicine shortages (46% Nov vs. 35% Aug). They have also become more concerned with fuel shortages (+16% change - 44% Nov vs. 38% Aug), travel between the UK and EU (+10% change - 59% Nov vs. 53% Aug), flight delays and cancellation (+9% - 55% Nov vs. 50% Aug) and shortages on the high street (+9% change - 33% Nov vs. 31% Aug).
· The public say they are more likely (or much more likely) to buy British’ in the following shopping categories after Brexit: The weekly shop (54%), clothes and footwear (39%), home technology (36%), home appliances (34%), designer clothes and jewellery (33%), new cars (32%), and alcohol and tobacco (29%).
For further information or data tables please contact:
Paul Middleton, KPMG Corporate Communications
Tel: (0) 20 7694 2180 / Mobile: 0738 725 7543 / Email: Paul.Middleton@kpmg.co.uk
KPMG Press Office
Tel: +44 (0) 207 694 8773
About this survey:
Hanbury Strategy is a member of the British Polling Council and abides by its rules. 4,015 adult members of the British public were polled online by Hanbury Strategy on behalf of KPMG between 31st October and 5th November 2018 using modelled data from smartphone applications to engage a nationally representative sample. Data is weighted to the profile of all adults aged 18+. Data weighted by gender, age and region. Targets for weighted data derived from Office for National Statistics (2016). For further details of survey methodology, please visit this link: https://hanburystrategycloud.filecloudonline.com/url/5yvi9ykajdp83f3d
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.