Brexit Impacts on Investments in UK Retail Sector
Added on 2022-10-19
80 Pages21021 Words299 Views
Running head: BREXIT IMPACTS ON INVESTMENTS IN UK RETAIL SECTOR
Brexit Effect on Investments in UK and Major Players Shifting their Headquarters Outside UK
and Create New Opportunities in Netherlands
Name of the University:
Name of the Student:
Authors Note:
Brexit Effect on Investments in UK and Major Players Shifting their Headquarters Outside UK
and Create New Opportunities in Netherlands
Name of the University:
Name of the Student:
Authors Note:
1BREXIT IMPACTS ON INVESTMENTS IN UK RETAIL SECTOR
Executive Summary
Brexit would have great impact on the foreign investments taking place within the nation.
Analyzing such impact takes into account the impact of increasing trade costs through
anticipating that the policy related with FDI remained unchanged. The aim of the study was to
analysis the impact of Brexit on foreign retail investments in UK due to which these companies
are shifting their headquarters to other nation such as Netherlands. This data collecting method
was employed as it facilitates in attaining detailed insights on the research problem. In addition,
it has also facilitated in collecting most relevant secondary data that can support reliable research
findings and such data is also easily available on the online sources that make the data collection
less time consuming and expensive. The report also highlighted certain system to challenges that
are likely to be faced by the retail organizations and such issues are to be faced because of Bruit
regulations includes changing consumer behavior, oversupply of the physical stores, increased
level of legacy debt, compliance along with regulatory and compliance costs, geopolitical along
with macro-economic costs along with the lack of talent at the top of retail businesses that can
facilitate in delivering necessary changes that is deemed to negatively impact the operations of
these businesses. The retail companies of UK are also recommended to set up a subsidiary or
entity within EU particular in case of selling products within the EU. Implementing such
recommendation can facilitate in maintaining fiscal representation for VAT purposes, trusting
along with compliance that can facilitate the companies in attaining exceptional advantages from
the market opportunities in Netherlands.
Executive Summary
Brexit would have great impact on the foreign investments taking place within the nation.
Analyzing such impact takes into account the impact of increasing trade costs through
anticipating that the policy related with FDI remained unchanged. The aim of the study was to
analysis the impact of Brexit on foreign retail investments in UK due to which these companies
are shifting their headquarters to other nation such as Netherlands. This data collecting method
was employed as it facilitates in attaining detailed insights on the research problem. In addition,
it has also facilitated in collecting most relevant secondary data that can support reliable research
findings and such data is also easily available on the online sources that make the data collection
less time consuming and expensive. The report also highlighted certain system to challenges that
are likely to be faced by the retail organizations and such issues are to be faced because of Bruit
regulations includes changing consumer behavior, oversupply of the physical stores, increased
level of legacy debt, compliance along with regulatory and compliance costs, geopolitical along
with macro-economic costs along with the lack of talent at the top of retail businesses that can
facilitate in delivering necessary changes that is deemed to negatively impact the operations of
these businesses. The retail companies of UK are also recommended to set up a subsidiary or
entity within EU particular in case of selling products within the EU. Implementing such
recommendation can facilitate in maintaining fiscal representation for VAT purposes, trusting
along with compliance that can facilitate the companies in attaining exceptional advantages from
the market opportunities in Netherlands.
2BREXIT IMPACTS ON INVESTMENTS IN UK RETAIL SECTOR
Acknowledgement
I feel great pleasure in acknowledging the assistance along with contributions of several other
individuals in contribution to the success of the dissertation. Firstly, Iwouldprefer to thank my
supervisor for her support, ideas along with feedbacks at the time of the proceeds in completing
this dissertation. Devoid of her support and guidance, this dissertation cannot be accomplished
within time. Finally, I would also like to express my gratitude to my peers for their total support
along with encouragement.
Acknowledgement
I feel great pleasure in acknowledging the assistance along with contributions of several other
individuals in contribution to the success of the dissertation. Firstly, Iwouldprefer to thank my
supervisor for her support, ideas along with feedbacks at the time of the proceeds in completing
this dissertation. Devoid of her support and guidance, this dissertation cannot be accomplished
within time. Finally, I would also like to express my gratitude to my peers for their total support
along with encouragement.
3BREXIT IMPACTS ON INVESTMENTS IN UK RETAIL SECTOR
Table of Contents
Chapter 1: Introduction....................................................................................................................6
1.1. Research Background.......................................................................................................6
1.2. Research Problem.............................................................................................................7
1.3. Research Significance.......................................................................................................8
1.4. Research Aim and Objectives...............................................................................................9
1.5. Research Questions.............................................................................................................10
1.6. Research Structure..............................................................................................................10
Chapter 2: Literature Review.........................................................................................................11
2.1. Introduction.........................................................................................................................11
2.2. Current Scenario in UK......................................................................................................12
2.3. Impact of Brexit on Foreign Investments...........................................................................14
2.4. UK Retail Industry Background.........................................................................................16
2.5. Implications of Brexit on the UK Retail Industry..............................................................19
2.6. UK Retailers Creating Business Opportunities in Netherlands Due to Brexit Implications
...................................................................................................................................................22
2.7. Research Gap......................................................................................................................25
2.8. Conceptual framework........................................................................................................26
2.9. Summary.............................................................................................................................27
Chapter 3: Research Methodology................................................................................................28
Table of Contents
Chapter 1: Introduction....................................................................................................................6
1.1. Research Background.......................................................................................................6
1.2. Research Problem.............................................................................................................7
1.3. Research Significance.......................................................................................................8
1.4. Research Aim and Objectives...............................................................................................9
1.5. Research Questions.............................................................................................................10
1.6. Research Structure..............................................................................................................10
Chapter 2: Literature Review.........................................................................................................11
2.1. Introduction.........................................................................................................................11
2.2. Current Scenario in UK......................................................................................................12
2.3. Impact of Brexit on Foreign Investments...........................................................................14
2.4. UK Retail Industry Background.........................................................................................16
2.5. Implications of Brexit on the UK Retail Industry..............................................................19
2.6. UK Retailers Creating Business Opportunities in Netherlands Due to Brexit Implications
...................................................................................................................................................22
2.7. Research Gap......................................................................................................................25
2.8. Conceptual framework........................................................................................................26
2.9. Summary.............................................................................................................................27
Chapter 3: Research Methodology................................................................................................28
4BREXIT IMPACTS ON INVESTMENTS IN UK RETAIL SECTOR
3.1. Introduction.........................................................................................................................28
3.2. Research Approach.............................................................................................................28
3.3. Research Philosophy...........................................................................................................30
3.4. Research Strategy...............................................................................................................31
3.5. Data Collection Methods....................................................................................................32
3.6. Data Analysis......................................................................................................................33
3.7. Ethical Considerations........................................................................................................33
3.8. Limitations..........................................................................................................................34
3.9. Summary.............................................................................................................................34
Chapter 4: Findings and Results....................................................................................................35
4.1. Data Presentation in Themes Relevant to Research Objectives.........................................35
Chapter 5: Analysis and Discussion of Findings...........................................................................48
5.1. Theme 1: Impact of Brexit in the Foreign Investments within UK Retail Industry...........48
5.2. Theme 2: Current Scenario of Brexit and Retail Industry in UK.......................................52
5.3. Theme 3: Implications of Brexit in UK Based on which they are Creating Business
Opportunities in Netherlands.....................................................................................................58
Chapter 6: Conclusion, Recommendations and Future Research..................................................63
6.1. Conclusion..........................................................................................................................63
6.2. Recommendations...............................................................................................................67
6.3. Future Research..................................................................................................................69
3.1. Introduction.........................................................................................................................28
3.2. Research Approach.............................................................................................................28
3.3. Research Philosophy...........................................................................................................30
3.4. Research Strategy...............................................................................................................31
3.5. Data Collection Methods....................................................................................................32
3.6. Data Analysis......................................................................................................................33
3.7. Ethical Considerations........................................................................................................33
3.8. Limitations..........................................................................................................................34
3.9. Summary.............................................................................................................................34
Chapter 4: Findings and Results....................................................................................................35
4.1. Data Presentation in Themes Relevant to Research Objectives.........................................35
Chapter 5: Analysis and Discussion of Findings...........................................................................48
5.1. Theme 1: Impact of Brexit in the Foreign Investments within UK Retail Industry...........48
5.2. Theme 2: Current Scenario of Brexit and Retail Industry in UK.......................................52
5.3. Theme 3: Implications of Brexit in UK Based on which they are Creating Business
Opportunities in Netherlands.....................................................................................................58
Chapter 6: Conclusion, Recommendations and Future Research..................................................63
6.1. Conclusion..........................................................................................................................63
6.2. Recommendations...............................................................................................................67
6.3. Future Research..................................................................................................................69
6BREXIT IMPACTS ON INVESTMENTS IN UK RETAIL SECTOR
Chapter 1: Introduction
1.1. Research Background
UK has a strong track record in securing the overseas investment is being put at risk by
Brexit with increased number of jobs created along with foreign capital deployed in Britain
dropping sharply since the EU referendum as per the analysis carried out by Financial Times.
Since the EU referendums the number of new foreign retail investments along with business
expansions isindicating disconcerting reductions. It has been observed that 2017, there were
more than 26000 foreign owned business within UK with the majority of them controlled by the
European nations (Booth et al. 2015). Overseas investors are focused on moving assets out of
UK due to Brexit. With increasedpopulation of UK the strong rule of law have increased
opportunity for the foreign investors. Brexit along with recent tax as well as lending rules
imposed by the government resulted in increased uncertainty and along with that the economic
implications of Brexit are attaining an increased focus. Due to the Brexit regulations FDI is
considered as an important component of the UK economy and because of such regulations slow
economic growth has been observed between the years from 2010 to 2017. Due to increased
tariffs imposed in the situation of Brexit he retail FDI within UK has been adversely impacted
disruption the advantageous impacts of FDI including technological now-hw, improved
workplace skills along with increased integration of the local companies within the international
economy (Boden et al. 2017).
It is also estimated that striking a comprehensive trade deal is deemed to manage the
negative impacts of Brexit on retail FDI within UK. In addition, it has also been gathered from
analyzing the existing macroeconomic estimates that FDI affects the growth combined with an
Chapter 1: Introduction
1.1. Research Background
UK has a strong track record in securing the overseas investment is being put at risk by
Brexit with increased number of jobs created along with foreign capital deployed in Britain
dropping sharply since the EU referendum as per the analysis carried out by Financial Times.
Since the EU referendums the number of new foreign retail investments along with business
expansions isindicating disconcerting reductions. It has been observed that 2017, there were
more than 26000 foreign owned business within UK with the majority of them controlled by the
European nations (Booth et al. 2015). Overseas investors are focused on moving assets out of
UK due to Brexit. With increasedpopulation of UK the strong rule of law have increased
opportunity for the foreign investors. Brexit along with recent tax as well as lending rules
imposed by the government resulted in increased uncertainty and along with that the economic
implications of Brexit are attaining an increased focus. Due to the Brexit regulations FDI is
considered as an important component of the UK economy and because of such regulations slow
economic growth has been observed between the years from 2010 to 2017. Due to increased
tariffs imposed in the situation of Brexit he retail FDI within UK has been adversely impacted
disruption the advantageous impacts of FDI including technological now-hw, improved
workplace skills along with increased integration of the local companies within the international
economy (Boden et al. 2017).
It is also estimated that striking a comprehensive trade deal is deemed to manage the
negative impacts of Brexit on retail FDI within UK. In addition, it has also been gathered from
analyzing the existing macroeconomic estimates that FDI affects the growth combined with an
7BREXIT IMPACTS ON INVESTMENTS IN UK RETAIL SECTOR
estimate of drastic Brexit impacts. Such impact is considered to result in 22% drop in the retail
companies FDI by 22% over the next few years (Durrani and Forbes 2017). Brexit regulations
being strict in UK can result in droop within FDI of the major retail players within the nations
resulting in 3.4% decline in the real income that is around 2,200 of the GDP in each household.
In addition, it has also been analyzed that the drastic impacts of Brexit can affect the operations
of retail companies in UK that can result in incomes losses and majorly static losses due to lower
trade by around 2.6%. Estimates of Brexit impact in the UK retail industry imply that the UK
retail offerings production is deemed to drop by 12% and the prices are increased by 2.5%
(Clarke and Ramscar 2019). Even if the UK retail organization manages a comprehensive trade
deal and maintains the tariffs at zero, the production within the retail industry is deemed to
observe a decline on the business. Considering such revelations, the current research will focus
on analysis of the drastic impacts of Brexit on the foreign retail investments within UK because
of which they are deciding to shift their headquarters in other opportunistic nations such as
Netherlands.
1.2. Research Problem
Brexit turned out to be a political shock that resulted in high uncertainty in the UK retail
sector of Canada. It was also been revealed that Brexit resulted in causing change within the
investment as well as employment for companies through causing business uncertainty along
with sales impact. Moreover, it has also been analyzed that the retail companies within the UK
economy that is involved in exporting a league fraction of its produced goods and services to EU
than imports (Shaw, Smith and Sculll 2017). In addition, it have also gathered that the retail
sector is likely to be highly sensitive to the impact of Brexit and a huge fraction of it is relied on
the nature of financial agreement with EU. One of the most drastic impacts of the Brexit
estimate of drastic Brexit impacts. Such impact is considered to result in 22% drop in the retail
companies FDI by 22% over the next few years (Durrani and Forbes 2017). Brexit regulations
being strict in UK can result in droop within FDI of the major retail players within the nations
resulting in 3.4% decline in the real income that is around 2,200 of the GDP in each household.
In addition, it has also been analyzed that the drastic impacts of Brexit can affect the operations
of retail companies in UK that can result in incomes losses and majorly static losses due to lower
trade by around 2.6%. Estimates of Brexit impact in the UK retail industry imply that the UK
retail offerings production is deemed to drop by 12% and the prices are increased by 2.5%
(Clarke and Ramscar 2019). Even if the UK retail organization manages a comprehensive trade
deal and maintains the tariffs at zero, the production within the retail industry is deemed to
observe a decline on the business. Considering such revelations, the current research will focus
on analysis of the drastic impacts of Brexit on the foreign retail investments within UK because
of which they are deciding to shift their headquarters in other opportunistic nations such as
Netherlands.
1.2. Research Problem
Brexit turned out to be a political shock that resulted in high uncertainty in the UK retail
sector of Canada. It was also been revealed that Brexit resulted in causing change within the
investment as well as employment for companies through causing business uncertainty along
with sales impact. Moreover, it has also been analyzed that the retail companies within the UK
economy that is involved in exporting a league fraction of its produced goods and services to EU
than imports (Shaw, Smith and Sculll 2017). In addition, it have also gathered that the retail
sector is likely to be highly sensitive to the impact of Brexit and a huge fraction of it is relied on
the nature of financial agreement with EU. One of the most drastic impacts of the Brexit
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