Less than one third of retail bosses confident about next six months

The chief executives surveyed were more confident about the longer-term industry outlook, with 60% saying they were optimistic about the next three years.

They were also more confident about their individual company’s long-term growth than short-term prospects. Of the 37 polled, 94% said they were confident about growth over the next three years, compared with 83% for the coming year.

PwC surveyed the chief executives of 37 major grocery, fashion and homewares retailers about economic concerns such as Brexit, the National Living Wage and inflation.

More than half of them (57%) said their growth plans were dependent on the UK staying in the EU. The other 43% said the vote would not have any impact on their plans.

Consumer confidence

Chief executives did largely agree however that a remain vote would buoy consumer confidence. They listed the impact of currency headwinds causing rising prices and squeezed margins, and a possible negative effect on EU imports, as their top concerns around Brexit.

The surveyed bosses said that a remain vote would have the biggest positive impact on consumer confidence, followed by interest rates staying at 0.5% and employment continuing to rise.

They identified changes in consumer behaviour and the costs associated with the National Living Wage, introduced last month, as having the biggest effect on their businesses over the next year.

PwC UK retailer and consumer leader Madeleine Thomson said: “Retail remains an industry in flux, with a business model that has worked for decades being reshaped at speed.

“It isn’t easy. At the same time as weathering economic and political uncertainties, and grappling with the outcome of the EU referendum, retailers have to keep up with emerging trends, anticipate consumer needs and manage across a wide range of different channels.

“Thought should be given now to what the wider business model will look like in 2020, and how the leaders can transition their business over the next few years to deal with this new cost model.”