Discount supermarkets are set to win big on Brexit as consumer confidence falls through the floor.
UK consumer confidence dropped by 11 points in July - the biggest monthly fall for over 26 years, according to GfK.
GfK’s consumer confidence index is now at -12, and dicount supermarkets could be the ones to benefit.
A report from the British Council of Shopping Centres and Cushman & Wakefield said: “Aldi and Lidl are primed to be the least affected due to a possible rise in consumers looking to trade down as they tighten their purse strings.”
Consumer confidence is just below the long-term average of -11 since 2011 and its “future trajectory depends on whether we enter a new period of damaging economic uncertainty or restore confidence” Joe Staton, head of market dynamics at GfK, said.
The report from BCSC said consumer confidence “should be viewed in context”; 2015 was the first time confidence was positive for a full calendar year, and the index is still well above the the low of -39 recorded in July 2008.
Any big effect from Brexit will come into effect next year. Retail sales growth is forecast to reach 4.4 per cent in 2016 - but is expected to slow to 2.0 per cent in 2017.
According to BSCS and Cushman & Wakefield, food prices may rise relatively quickly, as imports will be hit by the weak pound.
“Retailers that have done the best job growing relations in British agriculture could outperform their peers in the short term,” the report said.
Edward Cooke, acting chief executive of BCSC, said: “In our opinion, many of the fundamentals that drive retail performance – high employment, real wage growth and economic growth – remain relatively strong.
“Retail property remains a strong asset class with retail investors constantly looking at new ways to attract customers”
Mark Bourgeois, BCSC president said that consumers have been more concerned with “bagging a bargin in the summer sales than worrying about wider political volatility.”