The Impact of BREXIT on UK Retail Sector

The impact of BREXIT in UK business

TABLE OF CONTENTS
A) Introduction............................................................................................................................2
B) Theoretical background and research focus...........................................................................2
C) Justification and contextualization.........................................................................................6
D) Methodology...........................................................................................................................6
REFERENCES................................................................................................................................9

A) Introduction
UK retail sector is one of the leading and growing sector which also contributed biggest
amount for the growth of economy. In 2016, when UK votes to leave from European Union
(EU), there have been additional cost incurred which may come through EU markets. Whereas,
BREXIT is the term used when negotiation performed between UK and EU in order to finally
agreed to leave UK from EU and as a result, there are many negative impact analyzed within
retail sector. As, there are majority of the changes identified within UK retail sector which in
turn also changes the customer buying behavior. The present study will highlights the impact of
BREXIT upon UK retail sector and with the help of secondary research, study also determine the
range of changes within sector that also causes positive as well as negative impact.
In addition to this, with the help of qualitative research, scholar is able to develop a deep
understanding about the concept of BREXIT and examine the impact upon the UK retail sector.
This also included that there is almost negative impact identified due to leaving EU such that
higher input cost, increases in the labor cost, opposite impact upon the supply chain of the
products etc. Along with this, study examine the challenges which retail sector faces which
includes fluctuation in the prices of a products, changes in rules and regulations over the time
etc. This in turn also assists to examine whether there is any impact upon such sector and leads to
generate the best outcomes too.
B) Theoretical background and research focus
Theme 1:Develop an understanding relating to concept of BREXIT
In accordance with the Bloom and et.al.,(2019) BREXIT is all about withdrawal of UK
from EU, though UK is the only country who having been a member of state of EU from last 47
years. It is also an addition of a word British and exit which is actually taken place in January 31,
2016. Apart from this, a provision agreement was also approved by the UK parliament on
January 1, 2021. Also to make the agreement permanent, full chamber of EU parliament must
agreed with majority of vote. Casadei and Iammarino(2021) also argued that referendum held in
2016 where over 30 million people voted for the favor of UK in which 51.9% of them are agreed
to leave whereas only 48.1% in favor. This decision is also surprised the government, whereas in
June 2017 negotiation began. In this, different settlement performed and then transition period is

assigned that helps to settling the financial settlement as well as rights of UK and EU citizens
living cross border.
During voting time, it has been identified that England vote to leave EU whereas
Northern Ireland as well as Scotland, Wave voted to remain within EU. This is a shocking for the
government because of suddenly turned up votes. Moreover, David Cameron also resigned from
number 10 and was replaced by Theresa May who is leading the contest with conservative party.
Finally, it has been confirmed by her that UK would leave EU and then known as BREXIT,
despite being in favor of remain before announcing the results. As a result, terms introduced
where UK leave EU (What is BREXIT,2020).
Theme 2:Critically evaluate impact of BREXIT over retail sector of UK
In the opinion of Brown, Liñares-Zegarra and Wilson(2018) there is a negative impact
upon the retail industry within UK. Such that 62% of the fresh food is imported from EU and
46% of imported fresh food arrives in Britain from Spain. Whereas 22% from Netherlands, so
shoppers faces difficulty to meet the need of customers because of recession which was
previously identified(BREXIT industry insights, 2019). As a result, it decreases the home eating
and even customers buying behavior is also changes that leads to adverse impact upon the retail
industry in UK. More than 80% of the retailers are worried about the increasing price of
products and most of the people started stockpiling (term used when people purchase product in
bulk, even they do not need it) with a focus of food cupboard essentials. However, Küçük,
Lenoël and Macqueen(2021) argued that retailers are taking their effective measures in order
deal with BREXIT, but it also cause negative impact upon the consumer behavior changes. So it
can be stated that there is a disruption in the supply chain due to BREXIT and as a results
retailers are not able to provide products even by identifying the need of customers. This is also
occurred due to increase in the pricing of a products which lower down the spending of
customers so that economy of a country also affected.
Egan(2020) explained in their study that there is negative impact upon retail industry in
the term of trade because EU is the UK’s largest market for exports of food and non-alcoholic
drinks. As a result, there is a need to re-shape the supply chain after BREXIT. As a result, it can
be stated that leaving EU lead to increase the prices of products as well as delivery times.