Belfast Telegraph

Confidence still shaky, admits John Lewis boss

By Staff Reporter

The managing director of John Lewis has said that consumer confidence has failed to bounce back to pre-referendum levels, despite positive retail sales data since the vote.

"The original, immediate post-Brexit consumer confidence indices took an enormous fall, and everyone talked about the biggest fall ever," Andy Street explained.

"And actually, consumer confidence has not rebuilt to where it was."

Figures released in July revealed a sense of consumer resilience, with UK retail sales growing by 1.4% and beating expectations. It marked a rebound from June, when retail sales suffered their sharpest fall in six months.

But Mr Street stressed that any conclusion regarding fallout from the EU referendum is still premature.

"Normally I'm very clear cut about it, but the signals are actually extremely mixed," he said.

"Retail sales were relatively robust in July, so I'd describe them as almost contradictory signs at the moment."

Consumer confidence saw its biggest drop in more than 20 years in the wake of the Brexit vote, with around 60% of consumers expecting the UK's general economic situation to worsen over the following 12 months, according to post-referendum GfK Consumer Confidence Barometer survey released in July.

But GfK's August survey subsequently revealed that consumers were settling into a "wait and see reality".

The outlook for the general economic situation over the next 12 months saw an 11-point jump, marking a turnaround from July's 19-point fall, but it was still 25 points lower year-on-year.

"I think it's very, very difficult to discern a pattern yet," Mr Street said.

He added that big-ticket purchases like furniture - which "fell through the floor" during the financial crisis- managed to hold up in the wake of the referendum.

"So one thing I'll be absolutely clear on: those people who want to conclude the effects of Brexit so far are definitely premature," he said. "We really are only in the very, very early days of this playing out."

John Lewis earlier this summer warned that the plunge in sterling could become a problem for the retailer and, while the company is "fully hedged" against currency fluctuations for 2016-17, it could become an issue next year.

Sterling has fallen by about 11% against the US dollar since the referendum result.

Belfast Telegraph