The Impact of Brexit on Consumer Buying Behaviour on Aldi Store

This report discusses the impact of Brexit on Aldi store, one of the biggest retailers in the UK. It covers the changes in consumer buying behaviour, including spending and consumption capacity, perception and attitude, and demand and supply. The report also provides insights on how Aldi managed to overcome the challenges brought by Brexit.

The impact of Brexit on
consumer buying behaviour on
Aldi store
TABLE OF CONTENT
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Impact of Brexit on consumer buying behaviour on Aldi:..........................................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5
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INTRODUCTION
Brexit means withdrawal of UK from European Union, this withdrawal process of UK
impacted each and every sector of the economy. Brexit was not easy, this is one of the most
challenging thing for a country to leave membership after 47 years. As UK is no longer member
of European Union that means they are now free from any kind of rules and regulation imposes
by committee, with this decision of leaving European Union, UK was prepared to face various
challenges. Most of large scale business organization faced huge losses and challenges but this
decision somehow will bring betterment in the future of businesses of UK (Clarke and et.al
2017). Brexit have impacted every retail giant of UK, buying behaviour of customer tend to
change after this impact. This study is based on Aldi, this supermarket company is one of the
biggest reailer and supermarket giant tend to ruleover industry. This report will discuss impact of
Brexit on Aldi and provide clear understanding of impact. Al last this report will discuss how
behaviour of customer changed after Brexit and how this impacted on the performance of Aldi’s
and their process in the market.
MAIN BODY
Impact of Brexit on consumer buying behaviour on Aldi:
Brexit means leaving of UK from European Union, it is very this decision of UK was
challenging for every business organization of every industry. Many large scale companies like
Aldi have faced certain impact, mainly the buying behaviour of customer was changed. Major
drop in sales was notice in first impact on Brexit, Aldi’s performance was decreasing day by day
as there was difficulty in arranging raw material and hire labour from European market (Bloom
and et.al., 2019). Brexit continue to domain consumer and impacting their spending capacity, rise
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in inflation rate impacted value of pound. Brexit not only impacted business organization but
consumer buying behaviour was impacted as, there are certain impact of consumer buying
behaviour, these are:
Spending capacity: spending capacity of consumer is one of the most important factor which
influence sales of every business organization, after Brexit, British consumer faced problem due
to change in economic condition. Majority of customer voted not to leave European Union
because their personal financial condition will be affected, prices of goods and service was
increasing on daily basis because cost of manufacturing these goods was become unbearable for
business. Brexit limited supply of raw material in the country which result in high prices of raw
material impacting less manufacturing and higher prices of goods and service. Aldi have strong
customer base allowing them to sell their product in reasonable price but after Brexit consumer
are less likely to purchase these retail goods (Dhingra and et.al., 2016). Aldi started to loss their
potential customer because their buying habit was modified, although, this retail giant still have
those customer base which are ready to purchase goods accepting the impact of Brexit.
Consumption capacity: every customer have consumption capacity which allow them to stop at
certain level of consumption, this factors is one of the most important factor of economy. Income
level of consumer decide consumption capacity, after Brexit, this factor was impacted. It is very
clear that Brexit was not easy for both, company and consumer. Wealth of people was under risk
of collapsing because due to high inflation rate of economy, high inflation raised the price of
product which impacted buying behaviour of consumer. Aldi not only faced challenges of high
inflation rate of economy but their consumer started to change their habit of consumption
resulting in decreased sales of the product. UK government increase tax on goods and service
which means Aldi have to increase prices of their product whereas consumer are not ready to buy
these product due to high price (Pettifor, 2017). Although Aldi manage to overcome this issue
because they have effective strategy such as discount on products to attract old as well as new
consumer.
Perception and attitude: perception of consumer play vital role in their buying decision, this
perception allow them to understand the need of product for their personal need. On Brexit
impact, perception of consumer was changed resulting in change on buying behaviour, Aldi
know that these perception of consumer can drive them towards those retailers who tend to
provide product in lower cost. Brexit not only changed the perception of consumer but this also
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changed their attitude towards buying these product. Aldi lose European customer due to Brexit,
and British consumer was also changing their buying habit resulting in decreased sales.
Although, Aldi have store in European state as well as state in UK allowing them to manage this
impact.
Demand and supply: demand of customer increase on daily basis, these demand gets impacted
due to many reason mainly movement and action of government. After Brexit, supply chain of
retail businesses was badly impacted, business was unable to provide demanded product in the
market. It is very clear that when demand of consumer was not fulfilled by company then they
tend to change their preferred company (Tetlow and Stojanovic, 2018). Many retail business face
loss in customer and shifting their potential customer to competitors. Brexit directly impacted
supply chain of Aldi resulting in loss of potential customer, in post Brexit impact this company
unable to fulfil the rising demand of consumer. Under new policy of UK government, restriction
on import of raw material affected supply chain resulting in slow manufacturing of Aldi’s goods,
consumer do not like to wait for product which means these customer may changed to
competitors.
CONCLUSION
This report have discussed Brexit and its impact on business organization. Brexit was one of the
most challenging experience for every market giant who tend to rule the industry. This report has
provided clear understanding of Brexit and its impact on Aldi, this supermarket chain was
greatly impacted due to changes occur in the process of withdrawal of UK from European Union.
At last this report have discussed impact on buying behaviour of customer due to Brexit.
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REFERENCES
Books and journals
Bloom and et.al., 2019. The impact of Brexit on UK firms (No. w26218). National Bureau of
Economic Research.
Clarke and et.al 2017. Brexit. Cambridge University Press.
Dhingra and et.al., 2016. The impact of Brexit on foreign investment in the UK. BREXIT
2016, 24(2), pp.1-10.
Pettifor, A., 2017. Brexit and its consequences. Globalizations, 14(1), pp.127-132.
Tetlow, G. and Stojanovic, A., 2018. Understanding the economic impact of Brexit. Institute for
government, pp.2-76.
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