RETAIL ENVIRONMENT
Retailers urged to prepare their businesses for a no-deal Brexit
The convenience sector has been told to consider the impact of trading environment, workforce, inflation and regulation ahead of the end of the transition period on 31 December.
A UK Global Tariff is expected to be applied to products from the European Union (EU) from 1 January 2021 and would result in higher prices.
The Association of Convenience Stores (ACS) has urged stores to begin notifying customers about this now by displaying posters in store.
In line with regulation from 1 January, tobacco products must also have printed EU health warnings, although existing products can be supplied and sold “until stocks are exhausted.”
Symbol groups and wholesalers have given shop owners a Brexit stockpiling list in preparation for no-deal, following Government warnings.
According to independent store magazine betterRetailing.com, Nisa warned partnered stores about 40 core ambient products the group believes “could be significantly diminished by panic-buying or food shortages” after the planned EU exit day on 31 October. “We have decided to be proactive and release these to our partners to buy into as required,” said Nisa.
A third of the list, built with Co-op and suppliers, is made up of canned grocery lines, with bottled water and baby milk formula also featuring heavily.
Stockpiling 100 units of each of the 40 lines would cost independent retailers approximately £7,606.49. A Nisa spokesperson said these lines were “secured by emergency top-up and stockpiling activities”.
Bestway said it is “stocked for any eventuality” but agreed that retailers should start holding stock where practical.
A spokesperson for the group told betterRetailing: “We recommend retailers ensure they are well-stocked within the space they have in preparation for Brexit.
“Retailers could stock up on products, which have long date-codes, and which are not seasonal, or products which they know sell out fast. However, we don’t recommend doing this if it incurs risk to cash-flow or expensive storage charges.”
Commenting on the Brexit stockpiling list, wholesale expert and former Bestway operations director David Gilroy said: “Quite a few wholesalers will be doing the same thing, but less openly. What they are doing is quite smart, as long as the wholesaler has stock to back it up. It takes pressure off of the wholesaler.”
The announcements follow warnings in newly released Government worst-case scenario Brexit planning documents. They claimed fresh food supplies will decrease, but the UK would avoid “an overall shortage of food”.
However, the Government did admit Brexit could “reduce availability and choice of products and increase price”.
The plans claim that “increased pressure from Christmas preparations” will harm industry preparedness and that “there is a risk panic-buying will cause or exacerbate food supply disruption”.
Despite these being the Government’s worst-case scenario predictions, it admits that it “will not be able to fully anticipate all potential impacts”.
Asked about the level of risk for stores, Gilroy responded: “Those who lived through the 1970s know how quickly product shortages can escalate.
“If the worst-case scenario happens, stores have to accept they will run out of stock. If retailers are stocking up, it’s about the very basics – one line each of tea, coffee, water, biscuits and so on.
“Customer range expectations will go out the window, and trends like free-from, wellness and protein will be out.”
However, NFRN head of political engagement Adrian Roper said: “It is impossible to judge the impact that Brexit, in whatever form, will have on independent retailers. While it might be tempting to stock up on canned and long-dated items, retailers need to consider where they will store the stock over the coming months.”
