68% of consumers are now concerned about price changes as a result of Brexit with half feeling that retailers would be justified in increasing their prices after the UK’s departure
New research from Simon-Kucher highlights areas of price concern as we countdown to Brexit
Simon-Kucher has been tracking voters’ views on Brexit and its impact on prices and other areas since the referendum. Interestingly, the relative views of Leavers and Remainers have changed little, appearing as polarised as ever. Brexit causing a hit on the economy will certainly influence some people – our own analysis back in January showed that the increase in inflation from 2016 to 2017 had cost more than £900 per household. In spite of this though, our research shows that the economy was not an over-riding factor for many who voted to leave the EU, and this continues to be the case. For instance, our recent research demonstrated that even if inflation were to jump to levels exception in recent years (above 6%), only 1 in 5 Leave voters said they would change their vote.
However, whilst the economy is not a driving factor, we are seeing increased concern over price increases from both Remain and Leave voters. 68% stated they were either ‘Slightly concerned’ or ‘Very concerned’ about prices increasing as a results of Britain leaving the EU. We see the majority of this increase coming from Leave voters, with 45% now indicating a level of concern.
We also found that half of those surveyed now feel retailers would be justified in increasing prices after the UK’s departure if the reasons of higher costs due to Brexit was given. Remainers generally felt this was more justified with 69% indicating retailers were justified or partly justified. In contrast only 34% of Leavers felt the same. This indicates a tough time ahead for retailers trying to pass through increased costs after Brexit.
“We have seen consumer facing companies such as retailers and restaurants struggle to pass through price increases incurred as a result of increased exchange rates following the leave vote and we don’t expect to see this change moving forward”, commented Rosalind Hunter, Senior Director & Brexit Research Lead at Simon-Kucher.
As expected, British goods are seeing a boost from Brexit. We see a slowly increasing trend towards the purchase of more British goods with 29% of consumers now indicating they have purchased more British goods (versus the 24% seen 6 months ago). The majority of this increase is coming from Leave voters, increasing from 29% to 35%. More surprisingly though is that over two-thirds of Leave voters say they haven’t increased their spending on British brands.
Finally, Britain’s holiday-makers appear unlikely to alter their plans as a result of Brexit. 3 in 5 stated that Brexit will not change their holiday plans at all with only a small fraction (7%) indicating they will take fewer holidays.
“Staycations and local British holidays are slowly increasing in appeal, with 14% of respondents saying they plan on taking fewer holidays abroad and more in the UK, this is compared to 11% stating the same 6 months ago. This will be welcome news for the UK domestic travel industry”, commented Rosalind Hunter, Senior Director & Brexit Research Lead at Simon-Kucher.
About the research:
The research was conducted by Simon-Kucher & Partners directly in November 2016, April 2017, October 2017, April 2018 and October 2018. The panel was arranged by Lightspeed Research and respondents were weighted to match a national representative data sample:
November 2016: Total = 1,060; April 2017: Total = 756; October 2017: Total = 966; April 2018: Total = 1,008; October 2018 Total = 1,051.