There is only one certainty about Brexit at the moment: uncertainty. Whether we have a deal, no deal or potentially remain in the EU, there will be huge changes for Britain and for Britain’s shops. The retail industry in the UK is heavily reliant on supply chains from EU countries, with transportation, manufacture and markets all netted tightly with our friends on the continent. Severing them bluntly with no deal, in all honesty, would be a disaster.
In the event of a ‘no deal’ arrangement with the EU, and with no safeguard arrangements in place, we would be unable to import goods from the EU. At present, £341 billion pounds of EU exports enter the UK every year. That accounts for around 53% of all products on sale in the UK.
The immediate effects of this would be a reduction in the availability of fresh goods: as most of our fresh produce such as fruit, vegetables and fish are supplied from EU countries, we would run out in around six days. Your favourite confectionery brands will also be disappearing from the shelves: Lindt, as with other Swiss chocolate products, would quickly be sold out and not replaced. I know you’ve probably heard a lot about ‘Project Fear’ but this is just reality: we would have immediate food shortages in the UK. That’s just a reality in retail expectations. Forget not being able to choose what lettuce you want in Sainsbury’s, ‘no deal’ could wipe salad off the menu.
In the longer term, you can expect exotic and fresh produce to rocket in costs: oranges, lemons, flowers and apples would all face price increases due to scarcity issues. People tend to view rationing through rose-tinted glasses but it could well be an unpleasant reality if we don’t have any arrangements in place with EU countries for the supply chains into British shops. It should not be forgotten that a trade arrangement with an individual country can take decades to develop.
So what if we chose to remain in the EU? If we have the so-called ‘People’s Vote’ and vote to stay in the EU, certainty in the UK market would increase. Shareholders in major retailers across our high streets would feel more comfortable investing in our country, as there would be a clearer route to navigate in arranging imports, exports and financial margins. Consumer spending might also increase: fiscal reports suggest that customers are more cautious with their purse strings due to the uncertainty building up to the Brexit decision, as a recession is widely forecast in the looming possibility of no compromise being met with the EU. With higher customer spending, we could see a growth in retail jobs on our high streets and stores, and greater investment into our service based industries.
So what about another option: a deal being made with the EU for when we leave?
Well, there are upsides to this, for all the doom and gloom. As with remaining, there will be some vision into where Britain is heading in terms of supply chains and manufacturing. When investors and shareholders have a better image of what lies ahead, they are less likely to just pull out and lead to store shutdowns and job losses. We might see a drop as we rearrange the way we trade and import, but having that safety net of a deal will stop the complete crash in importation and the potential panic of customers who would otherwise stockpile and stop their spending.
Of course, we just don’t know. I’m no fortune teller, and anyone who tells you they know exactly what lies ahead for Britain’s high street is lying. But whatever happens, we need to think ahead and plan for all scenarios. Being unprepared as a business -or customer- for such a monumental change in the way we trade would be unbelievably hazardous.
By Martin Newman
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