British shoppers are expecting price hikes and store closures on the high street as a result of Brexit, according to new research from think tank Parliament Street.
More than two thirds (64 per cent) of consumers are expecting prices to rise due to the UK leaving the European Union, with 24 per cent preparing for a “substantial” increase, according to a poll of 1,000 shoppers carried out by Censuswide.
Meanwhile, more than half (54 per cent) expect to see more stores closing down in future. Hundreds of high street shop closures have been announced in recent months, with Marks & Spencer, Mothercare and House of Fraser all setting out plans to downsize.
Earlier this week, Homebase confirmed it will shut 42 branches across the UK and Ireland in a bid to cut its cost base.
The issue of costs is one of the main problems retailers are facing, Parliament Street said in its Retail Revolution report.
“Long-term leases are costly and preventing stores from downsizing or moving to cheaper rental properties,” the study said.
“One of the newer aspects we are seeing is that retail centres and high streets are investing in pop-up spaces to try out new areas to drive profits.”
The think tank also noted the launch of the Amazon Go store was a sign the online giant was “beginning to change the traditional high street model”.
“The traditional high street model is at risk of being forgotten with online retailers trying their luck at moving into the physical store after making a name for themselves online first,” the report said.
Parliament Street said retailers should invest in technology to save money, as a customer experience “replicated through mobile apps, sites and physically in-store will attract and retain customer loyalty”, and also recommended that brands improve personalisation for shoppers.
This was reflected in findings from Salesforce this week that showed 64 per cent of shoppers feel that retailers “don’t know them”.
Michael Ni at personalised shopping specialist RichRelevance said Parliament Street’s findings highlighted a need for retailers to avoid complacency and make sure they are investing to keep customers loyal to their brand.
“Already this year we have seen several high street chains collapse into administration, many of which have fallen behind in the race to deliver personalised digital experiences to customers online,” he said.
“Whilst it’s clear that the majority expect store closures to continue next year, these changes do not have to mean the end for major high street outlets.
“Investing in mobile apps, voice assistants and fingerprint scanning can help shake up customer experiences both in-store and online, giving struggling brands a much needed boost despite the potential turbulence of Brexit.”
