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Bad news for retailers as Brits suffer Brexit blues

UK consumers will be cautious in their spending this year as they respond to uncertainty driven by Brexit and the wider economic environment, according to PwC research involving 2,000 people.

“When speaking to consumers in recent years, they’ve consistently told us their main priorities for increased spending are groceries and holidays. This year, these categories remain important but we are seeing subtle changes for the younger generation who are prioritising spending money on their homes, health and beauty,” says Lisa Hooker, head of consumer markets at PwC.

“What is consistent across the board is that consumers are looking to get more for their money, with almost a third saying they will shop around more and buy more items on promotion. Pressure on consumer spending will impact the little luxuries - such as eating out - with just over a third of people saying they plan to cook at home more.”

For UK retailers, the only way to achieve growth is by taking market share away from other players and adapting to the more conscientious shopper, according to PwC. This includes investing in technology, specifically using artificial intelligence and data analytics to aid decision making and improve customer experience.

They also need to increase efficiencies across operating systems by transforming supply chains with the use of digital technologies to save costs. PwC also recommends that they review their corporate structure to “explore if M&A, divestments or partnerships/collaborations can improve their health”.