Brexit impacts online shopping
29 June 2016 - 14:17 by Graham Miller
The results of last week’s referendum on the UK’s membership of the EU seem to have shocked voters and campaigners on both sides, with the fallout of the decision to leave still ongoing.
In terms of shopping online, there are some interesting side-effects of Brexit which are starting to emerge, including the fact that the weakening of the pound might actually be beneficial for some retailers.
Kantar Retail points out in newly published analysis that there has been a spike in the number of overseas shoppers setting up accounts and placing orders via sites based in the UK. And with the value of the pound hitting record lows against other global currencies, it is the ideal time for people based elsewhere to bag a bargain.
Among the beneficiaries of this trend are major e-commerce companies like Amazon, which allow customers to order on British sites and get items delivered internationally.
For retailers that are owned and operated in the UK, the outlook is less rosy. Firms like Ocado and Sports Direct are said to be facing up to the prospect of having to source products from domestic suppliers, since the cost of importing goods will continue to rise if the pound does not recover.
Various companies saw share values plummet over the past few days, with Next taking a nine per cent hit on Monday while Marks & Spencer saw a steeper 12.6 per cent fall during the same period.
The aforementioned issues with sourcing goods now faced by Sports Direct saw its shares drop by 21 per cent compared to its pre-referendum levels.
Analysts argue that it is not only the prospect of more customers from overseas carrying out safe shopping online on UK sites that will impact the market in the coming weeks, but also the regulatory changes that are likely to come about if and when Article 50 of the Lisbon Treaty is invoked.