COVID-19 helping some independents to prepare for Brexit
Canny independent food retailers are using lessons learned during the COVID-19 pandemic to gear up for Brexit, due to happen at the end of the year.
While COVID-19 continues to dominate day-to-day activities, business owners have been striving to prepare for the end of the Brexit transition period on 31st December, writes Greg Pitcher.
Bayley & Sage founder Jennie Allen said the business – which consists of eight London delis – is planning for a no-deal Brexit.
“The difficulty with that is trade tariffs,” she said. “With the volume of stock we have been handling during COVID-19, we have taken on a second warehouse. We will fill them both ahead of Brexit.”
As well as talking to suppliers from the Continent, Bayley & Sage has used recent months to build relationships with suppliers closer to home.
“We have sourced a huge amount of new British lines – charcuterie and cheeses,” said Allen. “We are hedging our bets.”
Jen Grimstone-Jones, pictured right, co-owner of the Berkshire-based Cheese Etc. The Pangbourne Cheese Shop, has also held talks with suppliers from mainland Europe.
“We tend to work with really small, specialist importers and they all seem to be confident that they will continue to be able to supply us,” she said.
Although she anticipates a price hike on produce from mainland Europe if a no trade deal is agreed, Grimstone-Jones hopes direct purchases from British cheesemakers will soften this blow.
“Since we took over the shop, we have expanded our range of British cheeses,” she said. “If we had an issue with our Continental range, I think most of our customers would buy British instead.”
Stefano Cuomo, head of Kent food hall business Macknade Fine Foods, has started filling out documentation to assist the company’s transport agency with anticipated border protocols from 1st January.
“Everything has to be specified into product types and have correct numbers on them,” he said. “An extra layer of information is required.”
Cuomo believes the impact of the coronavirus has helped retailers prepare for the choppy waters of Brexit.
“Since COVID-19, we’re having to be clear on our margin. We are much tighter as a business. We are not going to stock products that won’t sell at the right price.”
During the pandemic, with so many leisure pursuits closed to people, Cuomo said the atmosphere offered by independent retailers had been key to attracting shoppers.
“Customer relationships have grown in strength,” he said. “If we can’t get as much product during Brexit, or prices increase, we can reduce our range and curate it more effectively, deliver an experience and maintain revenue and margins.”
Explained: What stage Brexit is at now
The UK officially left the EU earlier this year but effectively remains part of the union in trade terms until New Year’s Eve.
Talks to agree a new deal for 2021 and beyond ended a day early in July amid reports of a deadlock.
If an agreement can’t be reached over the coming months, the UK could end up trading with EU countries next year on terms dictated by the World Trade Organisation. This would mean a raft of product-specific import tariffs applied at borders – as well as the potential for additional checks and processes.
British Independent Retailers Association chief executive Andrew Goodacre said: “If I was a food retailer, I would be making sure my supply chain was robust. Will it be frictionless, and is any inflation coming through it?”
Goodacre added that the pandemic made the UK’s exit from the EU even more worrying.
“We are about to head into a recession so people will be very wary of prices going up,” he said. “We could well be in the midst of a second wave of COVID-19 in January, and the last thing we need is another disruptor in the market in the form of a disjointed Brexit.”
He called for clear messages from ministers well before the end of the transition period.
“During the pandemic, we have had clear direction from the government – we all knew to stay at home, save lives, stay 2m apart. We need those kind of guidelines to businesses if there are changes to the way goods are moving between Britain and Europe.”