Retailer plans to expand into Europe could be thwarted by Brexit

A growing number of retailers have set their sights on European expansion with ambitious plans for new store roll-outs outside of the UK. However, the continuing uncertainty over whether Britain will remain in the EU is likely to stall scheduled roll-out plans reveals PIDS (Project, Infrastructure and Deployment Services) experts at retail IT support specialists Barron McCann. 

Expanding into Europe seems to be the next logical decision many companies are faced with and it is well documented that successful retailers such as the German owned company, Aldi, have used European expansion. However, due to the ambiguity of Britain’s future in Europe, there is question over whether this progression for retailers, in particular, could be put on high alert for the foreseeable future.

According to research by ICSA and the Financial Times, approximately 70% of respondents said they expected some or significant damage to their business if the UK were to leave the EU. A further view from Fresh Business Thinking argued that: ‘Economic and political uncertainty is already impacting trade for some SMEs, and there is a fear that leaving the EU could severely destabilise business growth in the long-run.’

Rob Griffiths, head of PIDS at Barron McCann is overseeing a team that will be working on over 200 new store openings for several major retailers over the coming year. They’ve also recently been involved in a major store opening in Spain for a well-known fashion retailer. But despite the ambitious plans on the books, Griffiths believes that many retailers’ plans to expand overseas in 2016 could be impacted by the continued uncertainty regarding Britain and its position within the EU.

Rob explains: “I think it is fair to say that most retailers thinking of any new move into Europe will more than likely await the referendum outcome before making any major decisions. Even if a free trade agreement is reached as expected, the short term uncertainty will likely put most off any immediate plans. The impact of this is that new store openings could be put on hold, affecting retailer profits as well as job creation. There is also a risk that prime locations could be lost as retailers put a pause on new site negotiations.”

Rob believes that Europe is an undervalued territory due to a past of economic troubles, but in reality, is a great place for ambitious retailers to establish initial international locations.

He continues: “The free trade zone simplifies international trading by blurring the economic boundaries between countries, letting incredible opportunities bloom and making room for the substantial growth of a business. Views would perhaps indicate that, in lieu of Brexit, many small and large businesses are at the very least, questioning any future plans that combine Europe and their business growth.”