No-deal Brexit could wipe £5.4bn off eating out sector

No-deal Brexit could bring a sharp drop in consumer spending that would wipe billions off café and restaurant turnover, analysts have warned.

Low consumer confidence has already brought a fall in eating-out frequency that has contributed to a 1.9% – or £1.4bn – drop in the value of the market, according to research from agency MCA Insight.

A no-deal Brexit, which has become more likely in recent weeks, is likely to hit eating-out business owners and their suppliers even harder.

“Brexit has already had a detrimental impact on the UK eating-out market. However, our forecasts predict even bigger problems if the UK leaves the European Union without a deal,” said MCA Insight data scientist Daljit Johal.

“Rising inflation as a result of increased input prices will squeeze household incomes at a time when consumers are limiting discretionary spend. Saving is currently at a record low. However, we expect this to change as precautionary consumers save due to economic uncertainty. ”

He added that a no-deal Brexit would reduce UK GDP by 4.75-7.5%, which would take £5.4bn off the forecast value of the UK eating-out market in 2020.

MCA, which is owned by British Baker publisher William Reed Business Media, has used figures from its Operator Data Index and machine learning to develop its forecast. The work was inspired by the academic paper, The Costs of Economic Nationalism: Evidence from the Brexit Experiment, which was written by University of Oxford professor Petr Sedláček.

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