This paper examines how political events that sharpen identity affect consumer behaviour. We study the impact of the Brexit Referendum on consumer choices in the UK between British and EU grocery products. Using a unique panel dataset from a major retailer in the UK with over half a billion shopping trips for 12 million shoppers before and after the referendum, we find that consumers respond to the referendum results by increasing consumption of UK products and reducing consumption of some EU products. When the country of origin is saliently displayed on the package, the Brexit referendum is associated with a 3% increase in the share of British products purchased. We confirm that these changes in consumption are driven by British identity being top of mind by exploiting the impact of media storms: following the referendum, the increase in consumption of UK products is 4% higher in days in which there is intense social media discussion on Brexit. The effect of social media is stronger when users discuss the politics of Brexit as opposed to economic or social issues such as immigration. These findings underscore the importance of identity in shaping everyday economic decisions and the mediating role that the media can play in the process.
