Industry commentators have had their say on how the vote is likely to impact on the sector:
Steve Gotham, director of insight for MCA, said: “I suspect the prevailing sense of the economic outlook is that inward investment will be impacted and this is only going to have a negative impact on the economy and on employment. This will combine with rising inflation to stifle real wage growth and hit consumer confidence. In turn, discretionary spending will decline which can be expected to stifle foodservice market growth and expansion plans. That there will be a negative impact is not doomongering. The only question is how quickly and how long.
“But, let’s not look completely on the negative side. There will be opportunities – there will have to be. Benefits for some more price-led operators and some a degree of insulation at the top end – though more pain for the squeezed middle ground. There will be opportunities for operators and suppliers with more established international activities – and greater focus on securing wider geographical reach is going to be essential. There will be further stimulus for home delivery and potentially for those with products crossing over into the grocery marketplace. “
Mark Sheehan, managing director at Coffer Corporate Leisure, said: “We believe that London and the UK remain an attractive investment environment. There is sure to be some short term instability but the strong fundamentals remain and the UK will continue to attract investment. We see no reason why London shouldn’t remain the most attractive City in the world for property investors. We believe that leisure businesses will remain attractive. There may be short term weaknesses in consumer confidence but we expect the investors to remain bullish about the UK.
“Slightly weaker sterling may attract foreign investors to further invest into London.”
David Roberts, of Olswang, said: “There will be no immediate change to the ability of EU nationals to remain and work, which should provide stability to the work force for the next two years. Brexit could lead to uncertainty in real estate values which could affect rents, premiums on transfers and we could see tenants trigger break clauses - which could lead to more supply
“It could lead to a fall in consumer confidence which might affect discretionary spends which is what our industry relies on. This could lead to flat like for likes
“If there is a downturn, the opportunities will arise for well run, efficient, value based offerings and these sorts of businesses may well be able to capitalise on opportunities
“It’s difficult to know how the lending community will react and what interest rates will do but it would help trade if rates stayed low.
“There are always opportunities for M&A as weaker businesses become available to stronger concepts and I think we will see increased trade buyers. If the pound is materially devalued, corporates will become more affordable to new entrants to the UK market and this could lead to an increase in foreign ownership
“The travel industry expects price increases for holidays to the EU and in parallel, an increase in staycations.”
Kate Nicholls, Association of Licensed Multiple Retailers, said: “The EU referendum will, in time, prove momentous. However, for the moment, business will and must continue as normal. In the months ahead, while the impact of the decision unfolds, the ALMR will work closely with the Government and its agencies, to protect the commercial interests of our members. We are reassured to hear from the Governor of the Bank of England that he is fully prepared to back the UK economy and support British business and that clear messages should reassure consumers, investors and operators.
“While the uncertainties that will result from the referendum’s outcome are unwelcome, the fact is that the UK has spoken about an issue that it holds close to its heart. From here, all parties must move forward in a manner that best serves the UK’s citizens – our teams and our guests as well as our businesses, including the pubs, clubs and restaurants that remain at the heart of our society.”
Brigid Simmonds, chief executive of the British, Beer & Pub Association, said: “It is vital that the Government acts quickly to secure economic stability and protect consumer confidence. We will be vigilant to ensure the Brexit negotiations do not harm our exports abroad and the competitive position of beer and pubs in Britain.”
Ufi Ibrahim, chief executive of the British Hospitality Association said: “The EU referendum question represented a profound moment for the future of our industry. Hospitality and tourism benefits from a flourishing economy and any level of uncertainty will have an impact. The United Kingdom’s withdrawal from the European Union is the beginning of a process which could take years.”
“On Monday June the British Hospitality Association is convening its members, industry and political leaders to discuss economic and political ramifications in the short term. We will be framing a plan to ensure that we have a seat at the table on all negotiations including taxation, immigration and regulation.”
“As we go through this process, the BHA will call upon every politician in this country to do all they can to guard the strong reputation that our industry has built representing a hospitable and welcoming country all around the world. Our industry is one of the key drivers of exports, prosperity and the fourth largest employer supporting 4.5 million jobs.”
Mike Benner, SIBA managing director, said: “What Britain’s independent brewers require now is stability to enable them to run their businesses as normal and continue to brew great beers for the British people. As an increasing number of independent craft brewers look to expand markets beyond our shores through export, we will be keeping a close eye on developments over the coming months and taking steps to ensure our members’ interests are protected.”
Peter Backman, managing director of foodservice consultancy Horizons, said: “The UK economy will now face a period of uncertainty which is likely to be intense over the next few days and weeks, but will be ongoing for five years or so as Britain finds its new way in the world.
“Notably for foodservice, the pound will remain volatile and will trade at lower rates than over the last few years. Consumer sentiment will probably remain depressed, costs will be elevated, and there will be some uncertainty over employment because of our reliance on European labour.
“The foodservice sector will be less buoyant than it would have otherwise been – but the impact is likely to be felt differently in different areas of the business. Sectors that could benefit include tourism-related business including hotels and leisure, while restaurants, QSR and pubs could lose out. However, profitability, and therefore investment in the sector, is now under threat.
“Overall we could be facing reduced sales, increased costs and lower demand from the home market and while this could be offset to a small degree by more foreign tourists coming here due to the fall in the value of the pound, the eating out market now faces less growth than we predicted for this year and next.”