Brexit and Leisure Spending…
Britain has voted 52:48 to leave the EU.
- Despite the likelihood it was a protest vote gone wrong, Britain has voted to leave the EU
- ‘Democracy must be served’ say hard-core Brexiters, Juncker & anti-UK nutters in Brussels
- But for the moment, nothing – other than the vote – has happened.
- Article 50 may be invoked sooner (no), later (maybe) or never (also, maybe).
- In the meantime, uncertainty overhangs the UK economy, consumers, etc.
- Will Article 50 be invoked, will Labour jettison Corbyn, who will the next PM be?
- We don’t know how Europe will respond, what Sterling will do, how the economy will react.
- Asset prices may fall. Jobs may be lost & the only certainty is uncertainty.
- Still we are where we are but the Brexiters appear to have no plan
- All of the above is not consistent with steady, consistent leisure spending
- Indeed, it’s not even clear, given the Fixed Term Act, if we can call a General Election.
- In the face of uncertainty, consumers are likely to sit on their hands, reduce their spending
Small ticket spending could/should hold up:
- Uncertainty and parsimony are positively correlated. Consumers may sit on their hands.
- But this may be more of an issue for large rather than small ticket items.
- Deferring big purchases (cars, houses, furniture, white goods) is just that – it’s a deferral
- Lifestyles don’t change if you stick with the old clunker but foregoing the odd beer is a pain
- Unless jobs are lost in size, small ticket leisure companies’ sales will hold up reasonably well
When will we know?
- Very hard to say but July should be a ‘normal’ month (no Easter shift, half term shift, football)
- Given similar weather, comparing 2016 with 2015 should be like-for-like
- July starts on Friday & we will be very interested to hear how trading goes
- FYI this week in 2015 was the hottest of the year. The summer was rubbish thereafter.