The EU referendum, rising costs related to the National Living Wage and changes in consumer demands are the biggest concerns for UK retail CEOs, a new survey has found.
Over regulation, cyber threats and the speed of technological change were also recognised as issues that could harm growth prospects, according to the survey of 37 chief executives of supermarkets, fashion and home retailers employing nearly one million staff.
Just 29% of respondents are confident about prospects for the UK retail and consumer sector over the next six months.
Retailers said their top concerns regarding a potential Brexit were currency impacts causing prices to rise or margins to be squeezed and the impact on imports from the EU.
Chief executives appear to be more confident about the longer term prospects for their company’s revenue growth than they are for the year ahead.
Ninety-four percent said they are confident about growth over the next three years, compared to 83% over the next 12 months.
Madeleine Thomson, UK retail and consumer leader at PwC, said: “Retail remains an industry in flux, with a business model that has ‘worked’ for decades being reshaped at speed. It is apparent that retailers are wrestling with two major factors over the next 12 months, implementing the National Living Wage and adapting to changes in consumer demand, as customers change how they buy, what they buy and where they buy.
“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,” she added.
“Our analysis identifies four key themes – simplicity, trust, innovation, and the customer experience – that retail and consumer organisations must get right to give a solid foundation for growth in an intensely competitive industry.”