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Retail leaders’ economic optimism plunges amid Brexit fears

Only one-quarter of UK retail chairmen feel confident about the economic outlook for the next 12 months, down from almost three-quarters this time last year, according to research by advisory firm Korn Ferry.

This dramatic fall in confidence is largely driven by the uncertainty over what will happen if the UK votes to leave the European Union on June 23, the Korn Ferry Institute’s 2016 Survey of UK Retail Chairmen suggests.

Four in five (80%) of the 50 retail chairmen polled said they believed leaving the EU would have a negative impact on the UK economy. Despite this, only 64% said they would personally be voting to remain.

The discrepancy between the two figures was put down to people facing “head versus heart” decisions on the referendum.

Brian McBride, chairman of Asos, said in the event of a vote to leave he would be particularly concerned about “the potential impacts on the supply chain”.

“With any form of border tariff friction, parcels get stopped and searched more often, so there is greater potential for impact/delay in the product journey. It may not happen, but the uncertainty for it to happen is certainly there,” he explained.

There were also some positive findings from the report. Almost three-quarters of respondents (72%) said they expect their business to grow in the next 12 months, while 69% said they are planning to increase year-on-year investment across the same period.

Sarah Lim, managing director for retail at Korn Ferry, said the willingness to invest comes from the fact most retail leaders “share the belief that we’ll remain in the EU”.

“But even if their prediction comes true, there are still challenges in the year ahead, incuding a lack women in the top jobs,” she warned. ”Nearly 46% of chairman say they don’t have enough executive women in the talent pipeline.”

She added: ”Other challenges include the cost impact of national living wage and the very real threat of cyber-crime.”                  

 

 

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