UK Retailers Hit by Double Whammy of Brexit Frictions and US Tariffs
•February 11, 2026
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Why It Matters
Increasing trade frictions erode profitability and force UK retailers to rethink international expansion, potentially reshaping supply‑chain and market diversification strategies.
Key Takeaways
- •Brexit costs rose for 32.7% of UK retailers.
- •US tariffs and de‑minimis removal increase export expenses.
- •Over 40% of retailers cut December exports YoY.
- •Administrative paperwork burden grew for ~28% of retailers.
- •Some firms see stabilising EU costs and modest growth.
Pulse Analysis
The latest Office for National Statistics Business Insights survey underscores how Brexit’s lingering customs and regulatory hurdles continue to bite UK retailers. More than one‑third of surveyed retailers cite higher export costs, and a comparable share report reduced December shipments, signalling that the cost‑inflation curve has not plateaued even a decade after the referendum. This environment forces firms to allocate additional resources to compliance, stretching thin profit margins and prompting a reassessment of export‑centric business models.
Compounding the Brexit challenge, recent US trade policy shifts have eroded the attractiveness of America as a growth market. The elimination of the $800 de‑minimis exemption means even low‑value parcels now face full customs clearance, duties, and data reporting, while existing tariffs on many UK goods remain in place. These combined pressures raise landed costs and delivery times, nudging retailers toward price‑sensitive customers and potentially curtailing market share in the United States.
In response, UK retailers are diversifying away from sole reliance on EU or US corridors. Approximately 44% now serve both regions, while a growing minority focus exclusively on non‑EU markets to hedge against regulatory volatility. Companies that can adapt logistics, leverage technology platforms like ParcelHero, and negotiate favourable trade terms are better positioned to sustain profitability. The sector’s outlook hinges on how quickly firms can streamline paperwork, absorb tariff impacts, and identify resilient export destinations amid an increasingly fragmented global trade landscape.
UK retailers hit by double whammy of Brexit frictions and US tariffs
As the 10th anniversary of Britain’s decision to leave the EU looms, new ONS data shows UK retailers are still being hit by rising Brexit‑related costs. Dovetailing with tougher US trade rules, this is prompting some retailers to rethink international growth strategies.
The latest ONS Business Insights survey reports that 32.7% of retailers and 25.6% of manufacturers have seen EU export costs rise since the Brexit transition period, with increases continuing nearly a decade after the referendum. An additional 3.3% of retailers and 4.7% of manufacturers note that previously stable costs are now increasing again.
Parcelhero’s head of consumer research, David Jinks M.I.L.T described the growing Brexit-related costs and delays as “the tip of the iceberg”. He said: “It was not only to EU destinations that export costs rose. Costs for shipping to the USA and other international destinations also rose year-on-year… Trump’s tariffs, introduced last April, played a role in this overall increase.”
Of the 10,900 businesses surveyed by the ONS, 40.6% of retailers and 26.8% of manufacturers exported less in December compared to the previous year. Nearly 10% of retailers and 7% of manufacturers did not export during the “golden quarter,” typically the most profitable period.
Administrative burdens are increasing, with 28.2% of retailers and 25.5% of manufacturers spending more time on export paperwork year over year.
US market no longer a safe bet
The US, historically the UK’s largest non-EU export market, is no longer a guaranteed path for overseas growth. The removal of the $800 de minimis threshold for low-value imports in August 2025 means UK shipments now face full customs checks, duties, and additional data requirements, increasing costs and causing delays. These changes add to existing US tariffs on most UK goods and higher duties in key sectors.
ParcelHero’s data indicates that exporters are reevaluating their markets: 27.7% of retailers exported only to the EU, 17.8% only to non-EU markets (mainly the US), and 44.1% to both. Some resilience is evident, as 19.9% of retailers and 24.1% of manufacturers report stabilising EU costs, while 13.6% of retailers and 12.2% of manufacturers saw global export growth year over year.
Jinks expects continued volatility in the US market. “Focusing on the USA, the ongoing impact of new tariffs and the repeal of its de minimis rules means UK exporters are inevitably looking at a period of continuing volatility,” he warned.
However, he noted that the US market remains profitable for adaptable exporters, with guidance available at ParcelHero’s US delivery hub.
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The post UK retailers hit by double whammy of Brexit frictions and US tariffs appeared first on InternetRetailing.
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