Irish Retailers Fear Inflation, Tarrifs From Hard Brexit
Irish retailers fear that there will be a hard Brexit, which could result in possible cost inflation and additional tariffs, according to speakers at a PwC event this week.
Over 120 retail and FMCG leaders met at the event in Dublin, which focused on assessing the risks associated with Brexit, and trying to develop contingency plans.
The group said that the industry needs to 'collaborate and act with a single voice on key issues', and warned of possible cost inflation and currency risks.
Speakers said that they hope for a transitional arrangement, but noted there is very little time available to negotiate or to develop contingency plans.
The main points that were raised in regards to achieving a successful transition included the need to develop mitigating strategies to contain the passing on of costs to consumers, and the need for significant support to develop sales in emerging markets.
For the dairy industry, in particular, it was noted that a long transition period is necessary, beyond March 2019, in order to readjust.
Overall, retailers were encouraged to engage with the process, as doing nothing 'is not an option'.
"A significant challenge for the retail industry is identifying the strategic impact on the business," said Owen McFeely, PwC retail and consumer practice.
“We urge companies to engage with suppliers, look at diversification and plan for all scenarios. Look at the base-line assumptions, future trade volumes, potential tariffs and the potential cost of customs' compliance including additional resources."
"Then re-model your profit and loss account, looking at production costs and stay close to your customers. Finally, assess the results and consider next steps."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O’Sullivan. Click subscribe to sign up to ESM: The European Supermarket Magazine.