The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Getting an immediate understanding of the latest global economic developments can be time-consuming. However doing so is critical to make sure you can stay ahead of any early-warning signals that may affect your operating environment. For the UK market, Brexit is set to bring about a great amount of uncertainty and the ability to analyse the potential impact on industries, consumers and the economy is important for future planning.
The Brexit Scenarios tool encompasses our economic, income, wealth and industry forecast data. It provides “what if?” scenario analysis, a complete economic profile for the UK economy and early-warning signals about upcoming changes. It helps you stay informed with the Brexit process as it unfolds.
Source: Euromonitor International
According to our industry forecasts, when looking at forecast real value growth in a No-Deal Brexit scenario, alcoholic drinks, soft drinks and packaged food would be the most affected industries in the UK consumer market. A No-Deal Brexit is a particularly significant risk to the packaged food industry, which is forecast to lack growth momentum after Brexit. Categories driven by impulse consumption and premiumisation are likely to be the most affected, with consumers expected to switch to cheaper options. Snacks would be hit the most under the No-Deal Brexit scenario in Packaged Food. For alcoholic drinks, the potential of reverting to WTO rules in case of a No-Deal Brexit that would require fresh negotiations could lead to the loss of protection for categories such as Scotch whisky. Due to a weak pound and new tariffs, the prices of products imported from the EU, such as wine, are likely to rise as well. In soft drinks, a No-Deal Brexit is likely to result in a shift towards locally-sourced soft drinks. These brands will have a lower unit price compared to internationally produced soft drinks, as they will not be subject to newly introduced trade tariffs. To sustain export demand, British soft drinks producers might consider setting up their plants in the EU.
Since the Brexit vote in June 2016, the UK pound has lost around 10.0% of its value against the US dollar. On the back of the depreciating pound, consumer price inflation has been rising rapidly, above the Bank of England’s target of 2.0%. During times of rising costs and pressure to increase prices, UK consumers have faced a concept known as “shrinkflation”, where manufacturers reduce the package size of household goods in order to avoid raising prices. In the coming months, the weak pound and accelerating inflation are expected to continue casting a shadow on real wages, consumer confidence, and spending in the UK. In this situation, affordability and value for money might be expected to become more important to UK consumers, as the proportion of value-seeking consumers increases. This would result in either more frequent adoption of packaging size reductions or show up as bigger average cuts in packaging sizes in the UK packaged food industry. According to national statistics, 2,529 products had decreased in size between January 2012 and June 2017. Toblerone, Maltesers, M&Ms and Minstrels are a few examples of shrinking package sizes in the UK.
Following the key events in the Brexit process as it unfolds allows businesses to obtain an immediate and convenient interpretation of the consequences for the UK economy, industries and consumers and quickly drill down to the most important trends facing the UK during the Brexit process. To learn more about why this is critical for your strategy, download our report: Why Economies Analytics Matter for Business Strategy.