Brexit and Leisure Spending…

June 30 2016

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.

Current situation:

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

Possible time-line:

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.