Employment and consumer spending steady in the UK following Brexit
Employment and consumer spending are steady in the UK following the recent Brexit referendum, according to Mark Carter in Bord Bia’s London.
He says that this week saw the release of some eagerly awaited economic data which further indicated that the less benign post Brexit forecasts by many economists have yet to materialise.
In somewhat of a surprise to analysts, Carter says figures from the Office for National Statistics show that the UK unemployment rate has remained steady at the 11 year low of 4.9%, indicating that employer confidence and their hiring prospects are yet to be affected by referendum result.
He also highlights that the recent good weather has certainly assisted consumer spending, with Kantar crediting increased sales for ice cream and chilled drinks as contributing to an overall 0.3% increase in total grocery, the fastest acceleration for the overall market since March 2016.
“The same data showed no impact of Brexit on grocery price inflation which continues to remain in negative territory with a representative basket of goods 1.3% cheaper than the same time last year,” he said.
Although the boost in consumer spending may offer some optimism for retailers against their worst Brexit fears, Carter says the challenge posed by discounters continues, with both Lidl and Aldi the star performers with increased sales of 12.2% and 10.4% respectively.
He says while sales at Sainsbury’s fell by 0.6% and Morrisons down 1.8% the 5.5% fall in Asda figures will undoubtedly focus new CEO Sean Clarke’s mind on the work ahead to regain position.
Better news for Tesco however, Carter said, in the form of their slowest decline in six months, down only 0.4% as their new product strategy continues to pay off and their ‘Farm Brands’ were purchased by over a quarter of their shoppers.
He says the Tesco recovery if continued is forecast to put the retailer back on the road to growth by the end of this year, ending a period of decline for the retailer stretching back to March 2015.