Any fall in consumer spending may exacerbate existing ‘margin vice’ of forces gripping UK retail sector

24 June 2016

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Julie Carlyle EY’s Retail Sector leader comments: “The uncertainty that the leave result brings may mean that consumer spending is tempered in the short term. This exacerbates the strain that retailers are already under from the “margin vice” of deflation, national minimum wage as well as required investment in infrastructure. For many retail businesses, the impact of any further devaluation of sterling will have significant impact on the costs in the supply chain although the silver lining for some luxury retailers will be a boost from overseas spend. Retailers will further be considering the impact on their labour force in the longer term, especially within distribution and logistics, where there a significant number of EU employees as well as the yet unknown impact on trade tariffs.”