Owen Keogh, Origin Green Ambassador, Bord Bia – Irish Food Board
Since the Brexit vote consumer spending has been seen to prop up the UK economy but that premise may be beginning to crack as consumers and retailers continue to feel the pressure. According to this month’s Guardian Brexit analysis, rising fuel and food costs are having a bigger impact on household budgets as the value of the pound pushes up inflation further since the Brexit vote. The results for February highlighted how fish, cooking fats, fruit and sugary foods we all more expensive now compared with this time last year.
As businesses feel the pressure from the weakening pound, rising costs of imported materials and an increase in energy costs, the one answer for retailers is to boost internal efficiency. This week John Lewis announced 700 job losses while its sister company Waitrose also recently announced plans to close six stores and remove a level of management putting 700 jobs at risk.
Closer to home at last week’s ‘All Island Civic Dialogue’ on Brexit in Dublin Castle, Tara McCarthy spoke of the ways by which Bord Bia will be addressing Brexit in the coming months. The Brexit Analysis Toolkit and the deep dive into Irish food and drink exports to the UK will prove to be useful tools for Irish businesses exporting to the UK taking into consideration the growing pressure on UK retailers. This Toolkit will develop a company-specific analysis of its resilience to Brexit.
Understanding the British consumer will be paramount in the coming months as Theresa May triggers Article 50 before the end of March. The current indicators suggest that it would not be surprising to see a further squeeze on households translating to falling sales for retailers. With retail sales have fallen for the third month in a row already, falling sales could become a reality for retailers in 2017.
