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High Street spending and Brexit – looking for a deal

The Great British High Street is not enjoying a purple patch right now. The onslaught of internet retailers has hit some household favourites hard, with BHS, HMV and others falling victim to changing customer habits.

Some shops have struggled to adapt their business models to a new world of online purchasing and face an uphill battle to wrestle customers back from fleet-of-foot digital retailers.

The trend is not limited to the UK – major brands in the US and Europe have had to tighten their belts too, with global internet giants stealing their customers of all ages.

At least the surge seems to have slowed. The arrival of Amazon and its peers dealt a hammer blow to the high street, but that shock can only happen once, and retail company bosses have learned that these internet giants must be played at their own game.


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Every high street name has been developing its online presence over the last few years – at significant expense – hoping to head Amazon and the like on and for many it seems to be working. The last thing retailers in the UK need now is any more turbulence to upset their new digital outreach.

However, this may be exactly what they get, should Brexit result in an economic downturn as the first thing to be hit in a financial squeeze is disposable income.

If people think their spare money might be needed for something essential, such as petrol, gas bills or even the mortgage, impulse purchases are moved down the shopping list.

No matter whether a retailer has a fancy new website or not, if the choice is between keeping the lights on or buying a new pair of going out shoes, 99% of the UK public is likely to choose the former.

Already, the fear of a bad Brexit outcome is adding to the High Street’s woes.

December 2018 saw the slowest sales in a decade (since when the financial crisis had just hit) and the British Retail Consortium (BRC) said there had been a 2.6% fall in the number of people shopping in the three months to Christmas on a year earlier.

The BRC has been lobbying the government to agree a deal with Brussels, claiming its members need clarity on what they can import – and crucially whether there will be tariffs to pay on these goods, leading to price rises that might turn off potential customers further.

Investors in retail stocks need a strong constitution in 2019 – and may need an ever stronger one if no deal is agreed.

Watch the live price of retail stocks now.


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