NEARLY one-quarter of Scottish consumers say their spending habits were affected by Brexit in 2018 and a further 22 per cent expect to cut back this year, a survey has revealed.

The degree to which Scottish household spending is being affected by Brexit is revealed in accountancy firm PricewaterhouseCoopers’ 2019 retail outlook survey.

Claire Reid, head of retail for PwC in Scotland said: “Having voted to remain in the EU, it is unsurprising to see that Scots are among the most concerned about the economic impact of Brexit.”

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The 22% of consumers in Scotland declaring that their spending would change this year, having been unaffected in 2018, was by a significant margin the highest such proportion for any of the 11 nations and regions of Great Britain included in the survey.

The 24% saying Brexit had impacted spending in 2018 was broadly in line with the corresponding proportions recorded in most other parts of Great Britain, with only London and Wales seeing a significantly worse picture in terms of the effect on expenditure last year.

In Scotland, the proportion of consumers saying that Brexit had not affected their spending in 2018, and would not hit it this year, was 54%. PwC noted that 76% of Scottish consumers had said last year that Brexit would not affect their spending, with the latest survey findings thus signalling mounting concern among consumers north of the Border.

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Among the 11 nations and regions of Great Britain included in the survey, only London and Wales have lower proportions of consumers than Scotland signalling there will be no Brexit impact on their spending. In Wales, only 52% of consumers see no Brexit impact on spending, and in London the proportion is just 45%. In contrast, 70% of consumers in north-east England believe Brexit will have no impact on their spending.

Analysing the potential impact of Scottish consumers’ worries about the economic effects of the UK leaving the European Union, Ms Reid said: “While these fears are accelerating, the mood may shift if the UK manages to secure a deal with the EU and create more certainty in people’s minds, but, as it stands, we do expect to see more people tighten their belts this year.”

She added: “The fears come despite median earnings in Scotland increasing last year by 3%. Even accounting for inflation, consumers do have more money in their pockets than the previous year. What we are seeing, however, is that they are becoming increasingly careful about where that money is being spent.”

PwC noted its study had examined how the spending habits of Scottish consumers would change across 13 categories.

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It found that big-ticket expenditure was the most likely to be hit. Spending in restaurants and bars was also expected to be affected by reduced consumer confidence, PwC noted. Consumers signalled a sharp reduction in their spending on technology.

Jason Morris, PwC’s head of deals in Scotland, sees potential for retailers to increase market share in a “relatively flat economy” by taking a fresh look at their corporate structure or considering merger and acquisition activity.

He said: “In Scotland specifically, we are seeing evidence of businesses using M&A to adapt to the market. For example, Dobbies has reshaped its garden-centre portfolio with the acquisition of a number of large centres from Wyevale and the disposal of two smaller centres.”

A survey published last week showed households’ views of their financial well-being have deteriorated at the sharpest pace for nearly a year this month amid Brexit uncertainty, while perceptions of job security have continued to worsen.

Publishing the survey, information and analytics group IHS Markit warned that Brexit uncertainty continued to pose a “notable risk” to the UK economy.

John Bason, finance director of Associated British Foods, said yesterday that it was “unbelievable” that the UK was even contemplating leaving the EU without a deal. Prime Minister Theresa May continues to refuse to rule out a no-deal Brexit, despite pleas from the business community and fellow politicians.