Retailers will have to bear the cost of pricier products in order to compete post-Brexit.
Philip Benton, a senior research analyst at Euromonitor International, said although there are no signs indicating convenience retailers’ big sellers will be drastically hit once the UK leaves the EU, changes to the movement of goods should be watched “very carefully”.
The discounters and big four supermarkets and will be absorbing the extra costs, so the convenience sector will probably have to bear them initially and pass on the cost increases at a later stage
“In the packaged food market, it’s forecasted that there will only be a slight downturn in sales, which will be because of the weaker pound and lower spending power,” Benton said.
“The discounters and big four supermarkets and will be absorbing the extra costs, so the convenience sector will probably have to bear them initially and pass on the cost increases at a later stage.”
Benton advised that convenience retailers should watch how Brexit plays out to determine whether their products will be affected by cost increases – adding that confectionery will be one of the worst-hit categories.
“Retailers’ success comes down to their product offering, because people are going to stop spending,” he said.
“People will still be looking for tobacco, alcohol and ready meals – that shouldn’t change.
“But it’s vital that business owners are keeping up with trends – look at what’s happening in the packaged food market and diversify your range to adapt to them.
“Low-sugar and gluten-free products, especially healthy snack bars, are being actively sought out; retailers must cater for that demand.”