The UK will be one of the worst performing retail markets in the world next year as Brexit negotiations continue to hit the value of the pound, new research has shown.
The volume of UK retail sales will drop 1.8% year on year in 2017, according to the Consumer Goods and Retail 2017 report from forecasting service the Economist Intelligence Unit.
The fall will put the UK among the five worst performing retail markets in the world next year. The other countries expected to perform badly next year are Venezuela (down 29%), Hong Kong (down 2.6%), Ecuador (down 2%), and Italy (down 0.1%).
Jon Copestake, retail and consumer goods analyst at the Economist Intelligence Unit, said: “Fallout from the Brexit vote, and potential for further political upheaval in European elections will weigh on consumer confidence in 2017 leading to virtual stagnation in regional sales volumes.
“The UK could be hit particularly hard as the decision to leave the EU sinks in and a weak pound pushes up prices.”
The markets expected to perform the best next year are Iran and India, the report found. India is further liberalising its retail sector, while the Iranian economy is beginning to open up to foreign investment. Both countries are expected to have a sales increase of 6.6% each.
Pakistan is expected to be up 6.3%, while the Ukraine and China will both be up 6.2%.
Combined retail sales across 60 countries are expected to rise by 2.6% in volume terms in 2017, up from 2.4% growth in 2016.