Clothing retailers face more tough times from Brexit, Nielsen survey shows

British consumers are planning on cutting down their spending on new clothes and many are mulling moving their regular grocery shop to one offering lower prices, according to new market research published on Monday.

Some 41% of shoppers, and 54% of those aged 18-34, are planning to change their spending habits to save on household expenses, a survey by Nielsen at the end of June found.

More than half of these shoppers, or 52% to be exact, said they would save money by spending less on new clothes and switching to cheaper grocery brands, closely followed by 51% of this group who said they planned to cut down on takeaway food.

Britain's clothes retailers have already been citing the challenging conditions in the sector, with Next and Marks & Spencer for example both seeing garment sales squeezed so far this year.

There was also worrying news for supermarkets, with 37% of all the shoppers surveyed saying they planned to change the supermarket from the chain where they currently buy most of their groceries.

“Price-led retailers are those most likely to benefit from shoppers changing retailer or brands to save money, which includes the discounters, Aldi and Lidl," said Sophie Jones, Nielsen’s senior UK shopper research manager.

"They currently hold 11.4% market share and we expect them to push even harder and, thus, we anticipate more competition between retail channels for shoppers’ spend.”

However, while limited assortment discounter such as Aldi and Lidl might be expected to make some gains from such a change in behaviour, both chains buy much of their produce from the continent and so Nielsen's findings that 31% of shoppers plan to buy more British groceries clouds the matter somewhat.

The survey also found that 64% of shoppers believe Brexit will negatively impact the British economy in the short term, with 16% believing the prospects are positive. Also, 67% of shoppers said they thought Brexit will mean a rise in grocery prices, with only 2% thinking prices are likely to go down - which is at odds with recent newsflow from the industry.

Over the next six months, the state of the economy was revealed to be people’s biggest concern, with 55% of shoppers citing it as one of their top concerns.