Chief Executive's Blog: Is the Convenience Sector Ready for a No Deal Brexit?

Michael Gove has assured the House of Commons that he has met with the retail industry, and that we are ready for a no deal Brexit on 31 October. The first part of that is certainly true: we met with Mr Gove and the Business secretary Andrea Leadsom last week.  How about the second part: is our sector ready for a no deal Brexit?

We’re certainly preparing, and the publication of our briefing for convenience stores is a real step forward in explaining the issues we need to be thinking about.  But what this guidance actually does is set out the questions that retailers need to ask. 

Firstly, retailers need to ask questions of their suppliers about how products are going to reach local shops.  Delays at ports and subsequent transport problems in the UK will of course disrupt supply to our members, and how do you prepare for that if you’re an independent retailer? Nearly a quarter of independent retailers have literally no space to store products, and for short life products there’s little point in building stocks anyway.  We can think about these problems, consider contingency plans like alternative supply routes – one of the advantages that independent retailers have is that they source from a variety of suppliers, so can react and seek out product if their usual supplier has shortages - but we can’t prepare the whole supply chain, and frankly our partners can’t make congested roads flow, or unblock Customs checks at ports.

Challenges for our colleagues who may see their working status in the UK change are also a key consideration for local shops. We estimate 1-2% of people working in convenience stores are non-UK EU nationals, so a small proportion but still 4,000 – 8,000 people. We can prepare these colleagues by making them aware of the EU settled status scheme and ensuring they are applying for this if they want to. But we can’t control how many current or potential future colleagues might want to leave and return to other parts of the EU where they have full freedom to live and work without any further administration process or uncertainty about what future immigration policies might mean for them. We can think about how to attract people to our business, and how to develop the people we have but most businesses have this high up their agenda anyway, and most of our colleagues speak highly of the training and broader benefits of working in local shops.

Then there are the regulations that will change if we exit the EU without a deal. Most prominent among these are track and trace regulations that our sector has already spent thousands of hours and significant cost to comply with. Suspending this system, that for all its problems in implementation is the right thing to do in talking the illicit trade in tobacco, would be a punishing kick in the teeth for local shops. Are we prepared for track and trace to be put in limbo? Yes, there’s nothing more we would have to do, but the real question is whether the Government is ready to put something else in place straight away that will be just as targeted toward dealing with the dangerous illicit market. So far, we’ve seen no evidence of an alternative.

I’m proud of the job our members have done in preparing as best they can for a no deal Brexit, and of the work that ACS has done to lead this. We’re prepared, and our sector’s whole business model is based around reacting quickly to changes beyond our control, so I’m very confident we’ll make the best of whatever Brexit brings us. But it’s a stretch to say we’re ready, because we can’t control most of the things that will impact us. With time running out, most of all we need a deal with a transition period so that we can move forward with proper plans and greater certainty.

This entry was posted by Chris on Thu, 26/09/2019 - 11:42