Experts reveal Brexit planning opportunities

Staffing

The ACS estimates 2% of people working in stores are non-UK EU nationals. CEO James Lowman said: “There will be significant local and regional variations, with stores in some areas relying more heavily on EU nationals.” 

GlobalData analyst Thomas Brereton has urged retailers to assess their dependency on the EU: “Independents need to work out their reliance on the EU by looking at what percentage of their workforce is from there and how it is likely to be affected.” 

Retailers have reported recruitment becoming more challenging, but Christie & Co’s retail managing director, Steve Rodell, said this could be an opportunity as it is likely to hit multiples harder. “We have a lazy population who don’t want to do manual jobs,” he noted. “But independents are willing to work long hours and are more dynamic in what they need to do to survive.”

Do it today: Build a recruitment plan and discuss the issue with EU workers in your team. 

Consumer spend 

British Independent Retailers Association (BIRA) CEO Andrew Goodacre has predicted consumers will increase their spend on food and drink retailing following Brexit. “Customers will be shopping more for the necessities such as food and drink, which shows why eating out might be on the decline,” he said. “They won’t get the luxury foods, but they’ll get an alternative for £2 or less.” 

Retailer Vip Measuria, of One Stop the Prior Way in Borrowash, said produce is a priority. “We walked around our local supermarket last week to see where their produce comes from to help us assess our own stock,” he said. Brereton added it’s important to measure your product reliance on the EU. “If there are price increases in an area you are reliant on, look to see if there are opportunities or margins in other lines that keep people coming in,” he added.

Do it today: Focus on affordability and maximise offers on lines sourced from the UK. 

Security

Metropolitan Police Chief Cressida Dick recommended that retailers should consider planning for additional security in the event that concerns about shortages of goods leads to a significant increase in customers.

However, NFRN national president Mike Mitchelson has squashed any panic buying concerns. “I don’t see this happening, there’s just a lot of scaremongering taking place,” he said. “I would suggest that retailers just need to keep an eye on stock levels and spot any early trends. If they see more people buying certain goods, they need to get more of that product in.” 

Retailer Vince Malone, owner of Premier Tenby Stores in Pembrokeshire, said he hasn’t experienced any panic buying yet. “We haven’t seen any uplifts on products, but what I have done is go and talk to the management teams at my local multiples to discuss if they have,” he said.

Do it today: Build relationships with retailers in your area so you can share trends. 

Stockpiling

In Tesco’s results briefing on 10 January, CEO Dave Lewis confirmed there are plans to use its warehouses as well as Booker’s to stockpile goods. 

“We’ve worked through every single category in the big-volume lines and built deliberate plans for each of them,” he said. “We’ll use our network and their network as appropriate as we develop into the end of March. It’s good quality, rational planning.”

Lewis added, however, this isn’t happening yet: “We sat down with each individual supplier and decided what, if any, stock might be needed and where it might be kept and maintained.” Booker refused to offer more detail. Space shortage is a big reason why other wholesalers aren’t doing the same.

Sugro’s managing director, Neil Turton, noted: “Ninety per cent of our membership is delivered wholesale, but we’ve heard nothing about wholesalers saving goods to prepare for a no-deal Brexit.” 

 

 “We’re not stockpiling as that won’t be the best way to maximise our cash flow. It’s not as if we’re short of cash, but we don’t want to leave ourselves in a bad situation and there’s only so much stock you can tie up. The herd instinct could take over and customers could rush out to panic buy stock, but the industry seems well-prepared.”

 

“Retailers are planning ahead to meet consumer demand in all eventualities. Where it is feasible, given the nature of the product and available storage space, they are doing the prudent thing and increasing some stock. However, there is likely to be some disruption to the supply chain that would impact perishable produce, which cannot be stored for any prolonged length of time.” 

 

“We might struggle with employment in a hard Brexit. We’ve sat down and planned what we are going to do over the next eight-to-24 months in recruitment. At least we know what we are looking for so when it does happen, we can move on straight away in the hope we are the first looking in the market.”

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