With Brexit still to be implemented, its effects are already being felt. Three years on from the vote and the continuing uncertainty around what is actually going to happen – the old deal, a new deal, no deal and WTO rules, another vote, an election, the suspension of Parliament, nothing at all – hangs heavy over consumers and retailers alike.
And this uncertainty is now causing measurable problems. Shoppers have stopped spending, carefully holding on to their money while we stand by and look on the horror show that this has become.
Retailers, too, are vexed. They face the twin problems of fewer shoppers coming through their doors and portals and having to look at what the future may, or may not, hold.
A study by cross-border ecommerce solution provider Global-efinds that many have done nothing to plan for Brexit at all – hardly surprising, as it isn’t clear what anyone should be preparing for.
Despite this, as many as 43% of retailers say that whatever Brexit we get will impact them negatively: through sourcing products to currency fluctuations to tariffs changing.
Earlier this week, independent instant coffee brand Little’s, speaking on BBC Business, pointed out the stark reality of a no deal Brexit on an import and export driven brand, outlining that WTO rules would add 9% to the raw ingredients it imports from Europe and another 9% to it sales back to Europe – an 18% cost increase that it either swallows or passes on to the consumer.
BRC figures out this weekpoint to the worst retail figures – online and off – for nearly a quarter of a century. The pound has tanked. Confidence has sunk. Witness Arcadia: until recently it was flying high, now even it too has been forced into CVA negotiations. Game Digital, meanwhile, has been bought out by Sports Direct as it too fails to be able to stand on its own two feet in the High Street.
The stark reality is that whatever now happens with Brexit, retail, brands, manufacturing and pretty much everything else that UK plc does will be impacted by it – probably for the worse.
Should Brexit be delivered on 31 October, the horror may yet only get worse. Pulling out – with a deal or no deal – could well have a huge impact on buying habits across Black Friday and the run up the Christmas. This is when retailers make the lion’s share of their income. If that gets hit, then 2020 could yet be a worse retail year than we are currently in.
Even if we have a miraculous volte faceand cancel it, much damage has been done.
It is a perfect storm: retail is changing, shoppers are changing – both of which put pressure on the industry to change. However, it is all against a backdrop of monumental uncertainty. Beating these two problems at once is going to take some doing.