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Shifting Retailer Spending Affecting UK Advertising Market

Published on Jun 17 2016 12:12 PM in Retail tagged: UK / Advertising / Brexit

Shifting Retailer Spending Affecting UK Advertising Market

A sales executive at one of Britain's largest commercial television broadcasters has said that the changing way retailers are spending their marketing money has had a negative effect on the advertising market.

Jonathan Allen, sales director at Channel 4 told the Financial Times that UK retailers redeploying their marketing spend into other areas such as price promotions has hurt advertising, which could see the first fall in spending since the financial crisis in 2009.

Advertising spend surged by 7 per cent to £5.3 billion in the UK in 2015, and was expected to increase considerably once more in 2016. However, that has not materialised and sales have remained largely flat, with some analysts predicting sales may drop.

Allen said that retailers scaling back accounted for one quarter of the sales slowdown, with another quarter attributed to uncertainty over the possible UK exit from the EU, and half from a general turndown in the greater economy.

Jonathan Barnard, head of forecasting at Zenith told the FT that the slowdown "isn't enormously surprising" after many years of growth. He also pointed at the scale-back in retailer spending as a cause, adding that consumer confidence has been down since the collapse of retailers Austin Reed and BHS.

© 2016 European Supermarket Magazine – your source for the latest retail news. Article by John Golden. To subscribe to ESM: The European Supermarket Magazine, click here.

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