While still expected to be the least likely scenario when the UK leaves the EU on 31 October, MCA predicted a disruptive no-deal would shave at least £3.4bn off the forecast value of the eating-out market in 2020. A disorderly no-deal would slash the market by £5.4bn.
MCA’s predictions followed a £1.4bn reduction in the sector since the Brexit referendum, driven by a drop in eating-out frequency, thanks to low consumer confidence.
Detrimental impact on the UK
Daljit Johal, data scientist at MCA Insight, said: “It is clear that 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.
“A no-deal Brexit will have clear implications on consumer confidence and spend. 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.”
The prospect of a no-deal Brexit has had the food and drink industry preparing for a worst-case scenario come the end of October.
The threat of export tariffs and customs disruption would seriously affect food availability and the UK economy in the event of a no-deal, warned a report by MPs last month.
The report – The consequences of ‘no-deal’ for UK business – also highlighted concerns over the UK’s relationship with the European Food Safety Authority and its access to the EU Rapid Alert System for Food and Feed in the event of a no-deal, raising fears over the maintenance of food safety.
Meanwhile, exports of beef and sheepmeat to the EU would plummet and prices would drop in the event of a no-deal Brexit, Hybu Cig Cymru (HCC) – Meat Promotion Wales has warned.