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Nielsen: Brexit shakes consumer sentiment

Published:  11 July, 2016

According to new Nieslen data, the sentiment that "Brexit will negatively impact the British economy" is now being held by almost two-thirds of shoppers, with younger consumers looking to tighten their financial belts.

The figures released show that "64% of shoppers believe Brexit will negatively impact the British economy in the short term, 16% think it will be have a positive impact."

Over half (55%) of the people polled site the economy as their biggest concern in the next six months.

"Short term volatility is to be expected. We know shoppers - even since the recession - have held onto conservative spending habits. This is likely to be reinforced more heavily in the short term," said Sophie Jones, Nielsen's senior UK shopper research manager.

Further the data shows 41% of shoppers are planning to change their spending habits to save on household expenses. The younger the age group, the more likely they are to cut expenses with 54% of 18-34 year olds reporting they plan to make changes compared to 24% of people who were 55 years old and up.

While the sentiment may not be a very positive one, Jones does emphasise that it takes time for consumers to change habits.  She said: "The immediate concerns come of no surprise, however, there is typically a six month lag in any change to consumer spending following a change to sentiment."

Also with the hope that more clarity may come in the coming months about exactly what a 'leave' vote means for the UK and trading, things could look very different in a few months times.

"It's important to be aware that these are just early sentiments at this moment in time that could look very different in a few months. The Q3 Consumer Confidence Index will be the real litmus test of spending intentions," cautioned Jones.

The premiumisation wine trend of people buying less, but buying up seems to be particularly vulnerable as most consumers look at trying to save money and cut luxury items.

Nielsen figures report that 52% of consumers will spend less on new clothes and switch 'to cheaper grocery brands" as the most popular way to cut expenses with 51% of reporting they will cutting back on takeaways.