What was predicted for the UK Post-Brexit vote
There is certainly still some uncertainty surrounding Brexit and the unknown potential implications it may have over our income, expenditure and consumerism in the coming months.
It was predicted that among the hardest hit by the Brexit vote would be UK online sellers, which make up 45% of the EU’s UK exports and online retailers.
Although 2016 ended on a high, it is thought that it could be years until we will be able to fully appreciate the impending impression the decision to leave the EU has left on our fragile economy. Unfortunately, at present, the only certainty in 2017 seems to be the Bank of England’s projected rise in inflation, consequentially fuelled by a swift decrease in Pound Sterling value.
Rising travel costs, utilities bills and house prices, even amenities such as food costs, are regretfully, all contributing factors, which have unwittingly further increased the inevitable rise in the rate of inflation; further more, manufacturers are experiencing a rise in costs for raw materials, which in turn adds to the now seemingly ever-increasing prices of goods leaving factories.
What was predicted for consumerism?
Following the Brexit vote, the economy was predicted to suffer the largest decline in consumer confidence for 26 years.
With the value of the pound down 17% against the dollar since the decision to leave the EU, the pressure on import costs soon sparked price disputes between eminent suppliers and retailers.
With increasing costs greatly affecting import-dependent industries like the food industry; provoking altercations over much loved branded products; inducing ‘Marmite gate’ in 2016.
Indeed retailer Tesco was formerly under the spotlight for declining to stock certain brands including PG tips, Ben and Jerrys and Marmite just to name a few.
Whilst this was unfortunate news for Tesco customers, there was more going on behind the scenes than simply one supermarket’s defiance.
Brexit and the sudden decrease in the pound’s value had left manufacturers requiring higher prices for their produce.
Anglo-Dutch consumer goods manufacturer Unilever was one particular corporation, blaming Brexit for a 10 per cent price increase on dozens of brands; and in turn, due to the weakness of the pound and increased importation costs, forced Tesco into an ultimatum to pay an extra 10 per cent for its products, to compensate for the sudden drop in value. It was soon reported that Tesco quickly resolved the dispute and continue to stock all of our favourite necessities.
What is predicted for 2017, onwards?
Recent reports suggest that things may start to look up in 2017, with customers regaining confidence in the UK’s economic steadiness; with consumer market research conducted by GFK claiming to have witnessed a 2-point increase in customer confidence in January 2017.
However despite reports of consumer confidence steadily growing, it seems that customers still have a less than positive outlook on Britain’s economy.
GFK Jo Stanton reported that the initial positivity entering 2017, may soon be overshadowed by “consumers’ stubborn concerns about the wider economy”.
In the Logistics Industry, there are worries surrounding ‘Article 50’ which the government intend to invoke by end of March 2017. By no longer being a part of the EU, a lot of the UK’s privileges are under threat; if free movement of people and goods between the UK and the EU is not prohibited, it is predicted that there will be a significant impact on the logistics industry, and subsequently the supply chain for retailers who internationally source goods; which could impact disastrously on retailers and in turn the consumers.
An article published in the Wall Street Journal in June 2016 in which a number of senior executives from Global Shipping and logistics operators contributed; stated that the U.K. vote to leave the European Union will ‘rattle’ regional supply chains as Britain rebuilds its trading relationships and rules.
These Logistics companies said the “Brexit” vote could have a two-pronged impact in the near term, potentially cutting into the movement of goods but also fuelling more demand for professional services to help retailers and manufacturers navigate changing regulations and trade rules.
Peter Ward CEO of UKWA a trade association for the logistics industry stated that “The longterm implications of Brexit will remain opaque for some time, but the companies in our sector (logistics) will lead the way when it comes to ensuring that Britain remains open for business.”
On an upbeat positive note there are some undeniable facts; supply chains and logistics operations will always exist, they will just look different in the future because consumers will always consume, they will just change what, where and when.
GIDEON HILLMAN CONSULTING
Tel: 01926 430 883
Email: info@hillman-consulting.co.uk
Twitter: @gidhillman
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