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About This Report
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In 2016, the UK voted to leave the EU, an unprecedented step by a member state. The UK economy has undergone huge uncertainty, from when to trigger Article 50, to the hung parliament following snap elections, nearly a year after the referendum. Euromonitor’s Analytics models contain a range of Brexit scenarios. This report will help you to stay up-to-date on developments and understand the impact on UK consumer goods industries, the economy, and consumers through a range of macro scenarios.
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Overview
Why buy this report?
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.
Brexit scenario probabilities and outcomes
Delayed Free Trade Agreement: 35-45% probability
Despite adoption by the UK of a softer negotiations stance, the UK and the EU fail to reach a final deal by the March 2019 Article 50 deadline. In the interim, the EU and the UK agree to continue the UK’s membership in the EU for up to two-three more years. A final Free Trade Agreement (FTA) is reached in 2020-2022.
Light Brexit: 5-15% probability
Under pressure from more pro-EU factions in parliament and growing concerns over the costs of a hard Brexit, the British government softens its negotiating positions on immigration control. The EU agrees to some UK restrictions on immigration from Eastern Europe for a few more years, while preserving all rights of existing EU citizens in the UK and eventual restoration of free movement from the EU to the UK. This allows for a compromise, in which the UK retains access to the common market and financial sector passport rights. UK citizens also retain full EU movement and immigration rights.
Light Brexit will boost personal wealth
A Light Brexit would benefit the top consumer segment in the UK the most, amid an improved outlook for the financial sector and stock markets. Personal wealth will expand and Social Class A (the richest social class) will increase by 200,000 adults by 2021.
Light Brexit will weigh on inbound tourism
A Light Brexit would result in 645,000 less potential tourists arriving to the UK in 2019. With a more pro-European trade outlook, the pound would rally and relative exchange rates would push up the cost of visiting the UK.
Hard Brexit: 30-40% probability
Negotiations between the EU and the UK break down, and the UK leaves the EU in 2019 without reaching a trade agreement. Trade relations with the EU default to World Trade Organization (WTO) conditions. Heightened uncertainty and lower labour productivity lead to a long-term decline in UK real GDP of around 3.0% relative to the baseline forecast.
No-Deal Brexit will hurt economic growth
A No-Deal Brexit would have a negative impact on the UK economy, as the country would leave the EU and revert to World Trade Organization (WTO) conditions. Annual real GDP growth in the UK would fall to just 0.4% in 2019, the lowest in a decade.
No-Deal Brexit increases risk of poverty in London
A No-Deal Brexit would result in an expansion of London’s bottom consumer segment, as the top and middle contract. This would result in 57,900 more households in the bottom in 2019 from a year earlier, increasing the risk of poverty in the city.
Unilever amongst hardest hit companies by Brexit
Unilever Group will be amongst the companies hardest hit by Brexit and will lose an estimated US$1.5 billion in 2019.
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Introduction
Scope
Key events so far: The UK and the EU in deadlock over divorce bill
Future developments to watch
The road ahead: will the UK leave the EU in March 2019?
The road ahead: will phase two of negotiations be delayed?
Key findings
Brexit scenarios defined
UK Economic Outlook and Baseline
UK economic baseline
Inflation and monetary policy
Private sentiment and consumer spending
Latest data: Economic growth and business confidence slows
Impact on Consumer Markets
Packaged Food: global food manufacturers cautious
Beauty and Personal Care: UK market shows resilience
Soft Drinks: Brexit to push up imported soft drinks prices
Hot Drinks: tea and coffee prices under pressure
Home Care: dual strategy required for industry leaders
Tissue and Hygiene: shift from branded to private label
Alcoholic Drinks: opportunities for domestic producers
Travel: Brexit just one of several threats
Impact on Companies
No escape from Brexit for FMCG companies
Spotlight on Unilever Group: Brexit impact
Spotlight on Unilever Group: Tesco dispute prelude to price hikes
Spotlight on Unilever Group: next categories for price hikes?
Light Brexit Scenario
Economy: Light Brexit will be most favourable for economic growth
Consumers: personal wealth will be pushed upwards
Consumers: top segment’s spending to expand the most
Cities: London sees healthy growth in its richest households
Spotlight on London: Light Brexit means robust growth for top class
Packaged Food: Light Brexit likely to benefit imported food sales
Beauty and Personal Care: premium will be the biggest beneficiary
Soft Drinks: strongest influence on Ready-To-Drink (RTD) Tea
Hot Drinks: instant tea to p rofit most from a Light Brexit
Home Care: households unlikely to trade down in a Light Brexit
Tissue and Hygiene: Light Brexit scenario will be most favourable
Alcoholic Drinks: upgrades in forecasted growth in a Light Brexit
Travel Arrivals: a moderate negative effect on inbound arrivals
Travel Departures: strong uplift for UK outbound
No-deal Brexit Scenario
Economy: a No-Deal Brexit is the worst case scenario for the UK
Consumers: assets of Social Class D to expand the most
Consumers: greater discretionary spending for the bottom segment
Cities: Notable rise in London’s bottom segment
Spotlight on London: marked jump in London’s lower middle class
Packaged Food: snack sales will be the most affected
Beauty and Personal Care: discretionary categories fare worst
Soft Drinks: No-Deal Brexit scenario to adversely affect every category
Hot Drinks: tea and coffee e xpected to lose in a No-Deal Brexit
Home Care: households trade down and substitute
Tissue and Hygiene: least impact on sanitary protection
Alcoholic Drinks: more negativity for sector facing headwinds
Travel Arrivals: higher demand from the USA and Europe
Travel Departures: harsh blow to UK outbound tourism potential
Conclusion
Key i nsights: Light Brexit
Key insights: No-Deal Brexit
Scope and objectives
Definitions
Brexit scenarios defined
Why buy this report?
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.
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Request more informationComplete Catalogue
Brexit Reports
- Quarterly Brexit Report: Q1 2018 | Mar 2018
- Quarterly Brexit Report: Q1 2019 | Mar 2019
- Quarterly Brexit Report: Q2 2018 | Jun 2018
- Quarterly Brexit Report: Q2 2019 | Jun 2019
- Quarterly Brexit Report: Q3 2018 | Sep 2018
- Quarterly Brexit Report: Q3 2019 | Sep 2019
- Quarterly Brexit Report: Q4 2017 | Dec 2017
- Quarterly Brexit Report: Q4 2018 | Dec 2018
- Quarterly Brexit Report: Q4 2019 | Dec 2019
Strategy Reports
Complete Catalogue
Brexit Reports
- Quarterly Brexit Report: Q1 2018 | Mar 2018
- Quarterly Brexit Report: Q1 2019 | Mar 2019
- Quarterly Brexit Report: Q2 2018 | Jun 2018
- Quarterly Brexit Report: Q2 2019 | Jun 2019
- Quarterly Brexit Report: Q3 2018 | Sep 2018
- Quarterly Brexit Report: Q3 2019 | Sep 2019
- Quarterly Brexit Report: Q4 2017 | Dec 2017
- Quarterly Brexit Report: Q4 2018 | Dec 2018
- Quarterly Brexit Report: Q4 2019 | Dec 2019