Close this search box.

M&S, Dunelm, SportsDirect on the Brexit effect

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference

Retailers unveiling their latest figures on the London stockmarket this morning had a mention for the Brexit effect. We thought we’d take a look at what they said, and at whether that met with our expectations.

A word first on those expectations. It might be expected that UK-facing retailers would believe the decision to quit the European Union would hit their sales as domestic customers hold off purchases in a time of uncertainty. Conversely, those with strong international sales might be benefiting from strong sales from overseas buyers seeing bargains in the weak pound which is, we’re reminded, at 31-year lows. So what are retailers finding?

Marks & Spencer

The high street stalwart had a first-quarter trading statement out today, reporting on a 13-week period that finished a week after the referendum, on July 2. It also spotted a weakening in consumer confidence ahead of the vote. Its figures showed group sales down by 0.4% in the period, with UK sales down by 1.1%, or 4.3% on a like-for-like basis, while international sales were up by 0.7%. M& sales, which could be international or domestic – the company sells online and through stores within the EU – were up by 0.5%. However, clothing was down more dramatically in the quarter, by 8.3%, or 8.9% LFL – which may have more to do with customer interest than with customer confidence.

Chief executive Simon Rowe says it’s too soon to draw conclusions. “While it is too early to quantify the implications of Brexit, we are confident that our strategic priorities and the actions we are taking remain the right ones to deliver results for our customers and our business.”


In its end-of-year trading update, homewares company Dunelm said that it had seen a general slowdown in retailing ahead of the EU referendum. Changeable weather, it said, was also a factor here. That’s somewhat reflected in its figures. Total sales of £880.9m over the course of the year, to xx, were 7.1% up on the same time last year, with like-for-like sales – which strip out the effect of store openings and closures – up by 2.5%. In the fourth quarter alone, total sales of £203.8m were a more moderate 1.8% ahead, with like-for-like sales down by 1.1%. Home delivery, primarily from online sales, grew strongly during the year, when they reached £61.9m, 23.2% up on last time. During the fourth quarter alone, sales of £16m were 16.8% up.

Dunelm doesn’t currently deliver internationally but says on its website that it has an aspiration to do so. As a retailer, it is fairly focused on the UK market, suggesting this retailer may well feel the worst of any slowdown.

Chief executive John Browett said: “The current uncertainty makes the future trajectory of the economy and consumer confidence unclear; however, we are confident that Dunelm, as market leader, will continue to strengthen its position through its low cost operating model, everyday value, consistent cash generation and strong balance sheet.”

He said it was focused on improving the business both in store and online, as it continued “to develop Dunelm into a truly national homewares brand.”

Sports Direct

Sports Direct was reporting on its full-year figures, to April 24 – where sales rose by 2.5% to £2.9bn, of which online sales accounted for 17.4%. Pre-tax profits rose by 15.4% to £361.8m. But it said trading since the start of May, and leading up to the EU Referendum had been “broadly in line with management expectations”. Since the vote, it said, “we expect the current political uncertainty and potential potential weakness in the UK’s short to medium term economic outlook, is likely to act as a continuing drag on consumer confidence. When combined with the structural difficulties for UK retailers, including high street footfall, and our exposure to the weakness of the pound against the US dollar (as announced on 24 June 2016), these factors make the current outlook for FY17 somewhat uncertain and therefore hard to predict.”

However, it said: “We shall continue to focus on delivering an enhanced retail offering for our customers through an expanded product range and availability as well as optimising our online capability to benefit the overall group performance.”

Over the year, it said, it had improved search, and optimised the speed of the platform, especially in relation to mobile and tablet devices. The website has been integrated with social media channels.

Sports Direct has 14 non UK websites, and serves markets including EU countries, America and Australia.

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on