A weakened pound and prolonged economic uncertainty following Britain’s decision to leave the European Union could spell trouble for British retailers with stores in Europe, according to property agents.
Tony Devlin, head of retail at commercial property agent CBRE, told Drapers many retailers with a footprint in Europe will be feeling “up against it”.
“The weakening of the pound puts retailers with some sites in Europe, but primarily based in the UK, up against it. Everyone buys in US dollars so the pound being massively weak against the dollar is a problem. It’s bounced back a little now, but when the results of the referendum were first announced, the fall in the pound was horrendous. That uncertainty is not going away and uncertainty is not good for retail.”
He added: “I think people who have aspirations to go internationally but haven’t already will be having a serious think about whether now is the right time.”
Stuart Harris, commercial director and founder of Queensbury Real Estate, said stricter controls on immigration could also be a problem for international retailers.
“Some of the big concerns will be what visa requirements will UK staff working for retailers in France and Germany require, and secondly, what tariffs the European Union may put on goods going in to European markets- there’s a chance they could be made less competitive.”
However, he said that much still rests on the negotiations surrounding Britain’s exit. The withdrawal process is thought to take approximately two years.
“It’s something retailers will have to consider in the coming weeks and months as the terms of how Britain exits become clearer and the Article 50 exit clause is invoked,” he added.
“It’s going to be really tough for any chief executives to give any real clarity over their plans, it’ll be a case of sitting and waiting and letting the current volatility in the markets calm down.”