An Investigation of BREXIT's Impact on UK Retail Businesses

This report investigates the multifaceted impact of BREXIT on the UK retail sector. It begins with an introduction outlining the significance of the UK retail sector and the implications of the UK's departure from the European Union. The report delves into the theoretical background, exploring the concept of BREXIT and its historical context, including the referendum and subsequent negotiations. It critically evaluates BREXIT's impact on the retail sector, examining both positive and negative consequences, such as changes in customer behavior, supply chain disruptions, increased costs, and alterations in trade dynamics. Furthermore, the report identifies and analyzes the challenges faced by retail companies post-BREXIT, including new trade regulations, supply chain issues, and shifts in customer confidence. The research objectives include understanding the concept of BREXIT, evaluating its impact on the UK retail sector, and analyzing the challenges faced by retail companies. The methodology involves secondary research to gather data and insights from various sources.

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.

However, in the same time, custom duties are decreases which can be considered as a
opportunity for UK retailers. Serwicka and Tamberi(2018) also supported that the decision of
BREXIT will not eliminate migration to UK, though it is difficult for the EU to find migrants or
workers because it is the major source of labor for retailers and any restriction in the
movementmight also increases the labor cost of a market. So, it can be stated that due to change
in the market position, there is a direct impact upon retail sales.
Casadei and Iammarino(2021) defined the positive impact of BREXIT over the retail
industry such that it is examined that UK is one of the large exporter to Europe and that is why,
lower exchange rate is beneficial for short term. So, it leads to increase the input cost that assist
the sector to offer the best products over the time. In the term of standard of offered products to
EU by UK, it is examined that ay product sold to EU countries will have to conform to its
product standard by EU. As a result, this helps to avoid the problem within trade between EU
and UK. Also, it helps to meet the defined aim and retailers gain amount for the same. Therefore,
it is stated that there is a need to define the supply chain so that it does not cause any negative
impact upon the business performance. However, retailers are already faces numerous issue due
to BREXIT.Seidu and et.al.,(2021) examined that unemployment rate of the UK is also increases
due to leaving EU. Such that most of the people fired and leave the jobs due to inflation during
2016 as well as lower economic output. Hence, it causes adverse impact upon the business retail
industry as well.
Theme 3:Challenges which retail companies faced post BREXIT
Businesses are already prepare to deal with the BREXIT but due to inflation, strategies
does not helpful for the concerned retailers, as a result, company faces numerous challenges.
Fagetan(2021) shared on the study that new UK tariff regime and trade compliance is consider
one of the biggest challenge for the retailers which affect the overall business adversely.
Actually, main goal of BREXIT is to develop own trade laws without negotiating with others and
similarly, UK Global Tariff (UKGT) is applied to goods imported into UK after January 1, 2021.
Therefore it increases the cost of certain goods for UK importers and increases administrative
cost of complying with new rules which is difficult for retailers. May, Arancibia and
Manning(2021) critically evaluated that not having advance system of software that assist
company to track the performance and also meet the defined aim. In addition to this, changes in

customer buying behavior also lead to cause adverse impact upon the business performance,
because retailers are not able to offer the products as per the need. Further, retailers also faces
issue with regards to supply chain and this in turn lead to offering low quality products to their
customers.
As per the view ofSerwicka and Tamberi(2018) it is also evaluated that confidence of the
customers is lower down because if increasing prices of a products which in turn lower down the
economy of UK. That is why, this directly causes adverse impact upon sales of a firm which is
another concerning point of retailers. That is why, there is a need to minimize the challenges
because such causes direct impact upon the business performance. Bloom and et.al., (2019) also
stated that companies also faces issue to search for the best talented people who support firm to
make better decision for the welfare of a firm. This is because changes in the overall regulations
for which individual faces issue with regard to apply for jobs in UK. As a result, it can be stated
that there were many rules and regulation changes in order to secure the rights of UK nationals.
Aim
“To analyse impact of BREXIT over the working of retail sector of UK.A study on retail
industry UK.”
Research objectives
 To develop understanding relating to concept of BREXIT.
 To critically evaluate impact of BREXIT over retail sector of UK.
 To analyse the challenges which retail companies faced post BREXIT.
 To recommend some of the strategies with which retail companies can revive back to
growth and development.
Research questions
1. What is the concept of BREXIT?
2. What is the impact of BREXIT over companies pertaining to retail sector in UK?
3. What are the major challenges which retail company faced post BREXIT?

C) Justification and contextualization
The present research is important because it helps to determine the positive as well as
negative impact creates by BREXIT upon the UK retail industry. Also, with the help of such
research, scholar is also determines the challenges faced by retailers post BREXIT. Therefore,
the present study also beneficial to other researchers who want to study on this or similar topic,
in order to gain deep understanding pertaining to chosen topic. With the help of chose topic,
scholar is also develop a deep understanding about BREXIT and its impact over the companies.
Thus, it can be stated that the researcher will collect a deep-insight over the chosen topic and also
gain best outcomes regarding the same.
For the businesses within the retail sector the BREXIT posed many restriction and
problems and because of this the whole business of the retail sector was affected to a great
extent. This was majorly pertaining to the fact that when the companies will operate post
BREXIT then this will reduce the profitability of the companies. Hence, it is very essential for
the retail companies that they have proper and complete knowledge relating to the BREXIT and
its impact over the working and operations of retail companies. Thus, it is essential for every
company that they undertake the complete research over the topic of BREXIT and all the issues
related to it. This is necessary as if the company will not be having knowledge relating to
BREXIT and its regulations then this will affect profitability and trading of retail business.
Recently the BREXIT was approved and finalized and UK went out from EU and this has
affected the trade relation of UK with every other member country of the EU. Hence, for all the
retail companies it is very essential that they first research the changes because of BREXIT and
then ensure that how this will affect the operations of the company.
For the completion of the research the existing body of evidence will be used that is the
literature review will be conducted. Under this type of method the different scholarly articles,
books, journals and other sources and through this the retail companies can increase their
knowledge relating to major changes within working and operating pattern of the company. In
addition to this, BREXIT has also caused many of the changes within the rules and legislation
like working with other countries from EU, tax rates with those countries and many others.
Hence, for increasing the knowledge relating to the BREXIT and its impact over the business use

of secondary sources will be used and with help of it the knowledge and information will be
increased to a great extent.
This research has been undertaken with respect to the current time as the BREXIT has
recently being approved and now this will affect the working of the company in retail sector to a
great extent. Hence, this research is being initiated by keeping in mind the present time as here
there is need for the UK retail companies that how their business will be changed post BREXIT.
The reason which motivated the researcher to conduct the study on the impact of BREXIT on
working of retail is because this is the only sector which has will be affected because of UK
leaving the EU. In the end it can be stated that the present research will increase the knowledge
of retail companies the what is the major impact of BREXIT over the companies. In addition to
this the presearct research will also assist the company in analyzing the fact that how this
BREXIT will create challenges for the effective and efficient working of the companies within
the retail sector.
D) Methodology
Research type: It can be distinguished into two forms such as qualitative and
quantitative. Qualitative research is mainly deals with theoretical framework whereas
quantitative is relied upon numerical terms (Snyder, 2019). As per the current research, scholar
will use qualitative study because it is deal with only theoretical concepts of BREXIT within UK
retail industry. The topic is also based upon the theoretical framework and that is why,
quantitative study will not be opted.
Research Approach: There are two main types of approaches used by the scholar in
order to determine the assumption underlying to the research. Thus, in order to determine the
impact of BREXIT within UK retail industry, inductive approach has been used. This is relied
upon qualitative study and that is why, approach will be chosen over others in order to collect the
relied information which assist to meet the defined aim and objectives. As a result, it will help
researcher to conduct the study in more precise manner.
Research Philosophy: It is a belief about a way through data about a phenomenon can be
gathered and analyzed. Through this, scholar collects best sources in order to determine the

changes. Also, there are two main types of philosophies which include Positivism and
Interpretivism (Groenland, 2021). In order to determine the impact of BREXIT upon the retail
industry, Interpretivism research philosophy will be used. With the help of this philosophy,
scholar interpret the secondary data into an effectual manner which in turn assist to meet the
defined aim and answer research questions as well.
Data collection:To attain the defined aim an objectives, scholar gather relevant
information and this can be done by two modes. Such that under primary data collection
methods, questionnaire, survey are used to collect fresh information. Whereas under secondary
data collection methods, books and scholarly articles use that assists to clear concept. In the
context of present study, scholar will uses only secondary data collection methods because it
provides data on BREXIT which were already conducted in previous years. Therefore, with the
help of chosen data collection methods, scholar uses books, online website and scholarly articles
which were published after 2016 onwards in order to develop brief thesis.
Data analysis: It is a process of systematically applying statistical or logical tool in order
to describe as well as evaluate data. So, data can be analyses into two ways i.e. Thematic and
SPSS. As per the developed research aim, scholar will use thematic data analysis in which
relevant images and tables will be formulated that helps to determine the impact of BREXIT
within UK retail sector. Also, the chosen research type for the study is qualitative and that is why
SPSS does not used because it does not help to meet the requirement appropriately.
Reliability and validity: These are considered one of the most important factor that
defined the research is authentic or not. For reliability aspects, scholar should ensure that the
chosen articles and books are relevant to the research topic. Whereas, for validity aspects,
investigator should make sure that the entire chosen article are copyright protected and published
after 2016 onward. Through this, scholar use latest information pertaining to impact of BREXIT
upon te retail industry.
Ethical consideration: In order to conduct research properly, it is essential for the
researcher to comply with ethics. Also, all the principles must be followed by researcher that
assists to meet the defined aim (Nayak and Singh, 2021). In this, scholar may faces issue
regarding to accessibility that affect the entire research in adverse manner. Such that there are

many websites which are accesses denied and it may lead to delay the project deadline. As a
result, it is necessary for the researcher to comply with ethical consideration. On the other side,
ethical approval must be signed that ensured that the research is authentic and all the relevant
data is collected to gain better results. In addition to this, reference list is also added to the end of
a study that reflected that study is authentic and does not use copied from somewhere. Therefore,
it helps to meet the defined aim of a research and conduct the study in more authentic manner.
Research Limitation: Money, time as well as unavailability of the key sources are
considered some of the common research limitation that affect the results adversely. In the
present study, scholar faces time as well as money problem and that is why, qualitative research
type will be adopted which does not require huge time. Otherwise, quantitative study can be
opted only when the investigator have enough time and financial resources. Moreover,
unavailability of the sources can be minimized by using the keywords that assist to collect
reliable sources. Further, this in turn helps to convert the limitation into opportunities which
assist to meet the defined aim and generate the reliable results as well.

REFERENCES
Books and Journals
Bloom, N. and et.al.,2019. The impact of BREXIT on UK firms (No. w26218). National Bureau
of Economic Research.
Brown, R., Liñares-Zegarra, J.M. and Wilson, J.O., 2018. What happens if the rules change? The
impact of BREXIT on the future strategic intentions of UK SMEs. The Impact of BREXIT
on the Future Strategic Intentions of UK SMEs (March 1, 2018).
Casadei, P. and Iammarino, S., 2021. Trade policy shocks in the UK textile and apparel value
chain: Firm perceptions of BREXIT uncertainty. Journal of International Business Policy,
pp.1-24.
Casadei, P. and Iammarino, S., 2021. Trade policy shocks in the UK textile and apparel value
chain: Firm perceptions of BREXIT uncertainty. Journal of International Business Policy,
pp.1-24.
Egan, M., 2020.BREXIT and the single market.In The European Union after
BREXIT.Manchester University Press.
Fagetan, A.M., 2021. The Regulation of Hedge Funds in the United Kingdom and the Impact of
BREXIT.In The Regulation of Hedge Funds (pp. 241-282). Palgrave Macmillan, Cham.
Groenland, E., 2021. Research methodology in entrepreneurship.In World Encyclopedia of
Entrepreneurship.Edward Elgar Publishing.
Küçük, H., Lenoël, C. and Macqueen, R., 2021. UK economic outlook: BREXIT Britain in
Covid recovery ward. National Institute Economic Review, 255.
May, D., Arancibia, S. and Manning, L., 2021. Understanding UK farmers’ BREXIT voting
decision: A behavioural approach. Journal of Rural Studies. 81. pp.281-293.
Nayak, J.K. and Singh, P., 2021. Fundamentals of Research Methodology Problems and
Prospects.SSDN Publishers & Distributors.
Seidu, R.D. and et.al.,2021. The UK Retail Industry and its Effect on Construction
Sectors. Journal of Emerging Trends in Economics and Management Sciences
(JETEMS). 12(1).pp.27-33.
Serwicka, I. and Tamberi, N., 2018. Not backing Britain: FDI inflows since the BREXIT
referendum. UK Trade Policy Observatory Briefing Paper. 23.
Snyder, H., 2019. Literature review as a research methodology: An overview and
guidelines. Journal of Business Research. 104. pp.333-339.
Online

BREXIT industry insights.2019. [Online]. Available
through:<https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/international-
markets/deloitte-uk-BREXIT-flyers-BREXIT-insights-consumer-products-and-retail.pdf>.
What is BREXIT.2020. [Online]. Available through:
<https://www.ig.com/en/financial-events/what-is-BREXIT>.