The latest Deloitte Consumer Review looks at how the ongoing Brexit negotiations are impacting consumer confidence, spending and behaviour, and what this means for consumer-facing businesses.
The report seeks to convey the consumer’s voice, using research to provide some clarity on how consumers are viewing the impact of the referendum, what they feel their prospects are post-Brexit, and the key challenges and opportunities facing consumer businesses.
Key findings from the report include:
- Brexit ranks 6th on the list of areas of concern for UK consumers, suggesting that any negative effect associated with the referendum result has largely been shaken off
- Consumer confidence is divided: Remain voters haven seen negative change across all measures of consumer confidence while Leave voters have seen positive change across four measures.
- Consumers’ change in financial situation over the last 12 months is mixed: 43% of respondents reported no change, 36% stated it had worsened, and 18% reported an improvement in their financial situation
- Consumers’ views on the future of their personal finances are polarised between Remain and Leave voters, with 65% of the former believing they will be negatively impacted by Brexit, while 63% of the latter anticipate either no change or a positive change.
- A significant minority of consumers expect to actively change their spending habits as a result of Brexit – at least 30% expect to reduce their spending across all categories
- There is a greater consensus over the impact of Brexit on the price of goods and services, with a third of respondents expecting price increases across all categories
For businesses in the travel and aviation sector, the majority will be exposed to the same risks as other industries. Potential changes to customs duties and processes, as well as restrictions on the movement of labour could impact material costs across supply chains, while any change in consumer confidence and spending habits could affect the bottom line.
Deloitte suggests that businesses can actively start preparing for a potential drop in consumer spending, rather than taking a ‘wait and see’ approach. Businesses can explore a number of scenarios that could develop to better understand the business exposure against these scenarios. Contingency plans should also be implemented when likely outcomes become clearer, and business models could be assessed against potential Brexit impacts by planning for a scenario of maximum change.