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Post-Brexit pound slump drives online export boom for UK companies

SMEs in the UK saw their international PayPal sales rise 10 per cent year-on-year from January to June 2016, the rate of growth then trebled to 34 per cent year-on-year from July to December

Zlata Rodionova

Monday 06 March 2017 16:06 GMT

Economists have recently warned the battered pound is set to continue trading at record low (Getty)

British companies have seen a surge in international sales since the UK voted to leave the EU in June, according to a new research.

Online payment firm PayPal, revealed that small and medium-sized businesses (SMEs) in the UK saw international PayPal sales more than treble due to the post-Brexit slump in the value of the pound which makes products cheaper for overseas buyers.

The amount foreign shoppers spent with UK SMEs already rose 10 per cent year-on-year from January to June 2016, the rate of growth then trebled to 34 per cent year-on-year from July to December.

Mark Brant, managing director at PayPal UK, said online SMEs were well equipped to navigate the unpredictable market conditions following the EU referendum result.

“Of course lower prices played a major part in boosting international sales, but there were many other contributing factors,” Mr Brant said.

"The small businesses that were best placed to benefit from the influx of international shoppers were the ones who had already adapted their online stores - for example by letting customers browse in their own language, and pay in their own currency,” he added.

Economists have recently warned the battered pound is set to continue trading at record lows even once Prime Minister Theresa May’s government triggers official proceeding to exit the EU.

How Brexit affected Britain's favourite foods from Weetabix to Marmite

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1/8How Brexit affected Britain's favourite foods from Weetabix to Marmite

How Brexit affected Britain's favourite foods from Weetabix to Marmite

Weetabix

Chief executive of Weetabix Giles Turrell has warned that the price of one of the nation’s favourite breakfast are likely to go up this year by low-single digits in percentage terms.

Reuters

How Brexit affected Britain's favourite foods from Weetabix to Marmite

Nescafé

The cost of a 100g jar of Nescafé Original at Sainsbury’s has gone up 40p from £2.75 to £3.15 – a 14 per cent rise—since the Brexit vote.

PA

How Brexit affected Britain's favourite foods from Weetabix to Marmite

Freddo

When contacted by The Independent this month, a Mondelez spokesperson declined to discuss specific brands but confirmed that there would be "selective" price increases across its range despite the American multi-national confectionery giant reporting profits of $548m (£450m) in its last three-month financial period. Mondelez, which bought Cadbury in 2010, said rising commodity costs combined with the slump in the value of the pound had made its products more expensive to make.

Cadbury

How Brexit affected Britain's favourite foods from Weetabix to Marmite

Mr Kipling cakes

Premier Foods, the maker of Mr Kipling and Bisto gravy, said that it was considering price rises on a case-by-case basis

Reuters

How Brexit affected Britain's favourite foods from Weetabix to Marmite

Walkers Crisps

Walkers, owned by US giant PepsiCo, said "the weakened value of the pound" is affecting the import cost of some of its materials. A Walkers spokesman told the Press Association that a 32g standard bag was set to increase from 50p to 55p, and the larger grab bag from 75p to 80p.

Getty

How Brexit affected Britain's favourite foods from Weetabix to Marmite

Marmite

Tesco removed Marmite and other Unilever household brand from its website last October, after the manufacturer tried to raise its prices by about 10 per cent owing to sterling’s slump. Tesco and Unilever resolved their argument, but the price of Marmite has increased in UK supermarkets with the grocer reporting a 250g jar of Marmite will now cost Morrisons’ customers £2.64 - an increase of 12.5 per cent.

Rex

How Brexit affected Britain's favourite foods from Weetabix to Marmite

Toblerone

Toblerone came under fire in November after it increased the space between the distinctive triangles of its bars. Mondelez International, the company which makes the product, said the change was made due to price rises in recent months.

Pixabay

How Brexit affected Britain's favourite foods from Weetabix to Marmite

Maltesers

Maltesers, billed as the “lighter way to enjoy chocolate”, have also shrunk in size. Mars, which owns the brand, has reduced its pouch weight by 15 per cent. Mars said rising costs mean it had to make the unenviable decision between increasing its prices or reducing the weight of its Malteser packs.

iStockphoto

According to a poll of more than 60 banks and research institutions conducted by Reuters, sterling, which is already down 17 per cent against the dollar and 12 per cent against the euro since the Brexit vote, will not recover any time soon.

Deutsche Bank predicted sterling will plunge to $1.14 once Article 50 is triggered later this month.

This would be a new 31-year low, even including the flash crash that sent the pound plunging more than 6 per cent on 7 October.

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