Brexit and rising retail prices.
We recently partnered with Retail Week to run an exclusive poll about Brexit and rising retail prices. Our aim was to find out how people are feeling as the national press is dominated with tales of woe around a no-deal Brexit, with a period of economic uncertainty ahead of us.
In July, it was reported that the government had been preparing plans to stockpile food in the eventuality that a ‘no deal’ Brexit would interrupt our current free flow of goods. Theresa May has since commented that this was only one aspect of their plan to “prepare for all eventualities”.
However, the European Commission’s warning that “the UK’s withdrawal will undoubtedly cause disruption… whether or not there is a deal” reflects the public’s concern about what Brexit means for retail prices in their everyday lives.
What the Government says.
The government published its advice to businesses and citizens this week (23rd August 2018):
– The cost of card payments between the UK and EU will “likely increase” and won’t be covered by a ban on surcharges
– Business trading with the EU should start planning for new customs checks, and might have to pay for new software or logistical help
– Britons living elsewhere in Europe could lose access to UK banking and pension services without EU action
“Let me assure you that, contrary to one of the wilder claims, you will still be able to enjoy a BLT after Brexit, and there are no plans to deploy the Army to maintain food supplies,“
Brexit Secretary Dominic Raab
Our human understanding analysis.
We know from psychology that the desire to stockpile is not always based on logical or rational behaviour. When we feel like something is out of our control (in this case, a no deal Brexit causing delays and changes to our food supply) our primal instincts are dialled up. It is likely therefore that as the urgency around leaving the EU increases, more people may consider stockpiling.
It is not surprising to see so many people concerned about rising retail and food prices. Any period of uncertainty leaves people feeling unsure about the future and this can change decision making. In the past, financial uncertainty has changed where people shop, or how they shop. Continuing to move away from the Big Four and hunting for special offers may become more important to customers as they become more savvy in their shopping.
Our insight in Retail Week.
Over half of consumers feel that it is likely the UK will leave the EU with a ‘no deal’ Brexit. Those that voted to remain seem even more sceptical.
Seven in ten consumers are concerned that both food prices, and retail prices in general, will rise after the UK has left the EU.
Once the UK has left the EU, how concerned are you about each of the following?
Those that voted to remain are significantly more concerned about both rising food prices, and rising retail prices in general, once the UK has left the EU.
Although consumers are concerned about a rise in food prices, almost two thirds feel they are unlikely to stockpile additional food ahead of our exit from the EU.
To what extent do you plan to stockpile additional food ahead of our exit from the EU?
An important role for communications.
Grocers need to provide reassurance to customers that they are putting the customer first. Hunger and fear are very powerful human instincts which can drive us to change our behaviour. Retailers need to be careful with their language and comms to avoid creating anxiety amongst customers.
To chat further about how to understand how economic uncertainty can change our decision making, please get in touch to have a chat.