An industry-wide survey has revealed that over a third of retailers indicated they have ‘done little to no preparation’ or feel ‘very underprepared’.
According to the research by retail analytics firm Retail Economics, top retailer concerns for a no-deal scenario were supply chain management (64%), availability and cost of labour (56%) and rising tariff costs (52%).
Concerning potential increases in sourcing costs, 73% said that they had performed some analysis to quantify the impact on their business, leaving 27% having done nothing. However, almost a third (32%) said that there would be ‘significant additional costs’.
The group said that, on a more positive note, just over 50% of those surveyed said that they have ‘“done some preparation”. However, when faced with additional trading challenges, over half (59%) suggested that they had identified ways to partially mitigate new costs.
The surveyed retailers said they are considering “a wide range of mitigating factors”, including stockpiling where possible, seeking different routes across the Channel, signposting support for the EU workforce and currency hedging.
Richard Lim, CEO of Retail Economics, said: “After two and a half years, the Brexit options have suddenly come into very sharp focus. Option one, the UK leaves the EU with no deal on 29 March 2019 meaning that trading relations fall back on to WTO terms.
“Option two, the UK withdraws its Article 50 notification and stays in the EU. Finally, the UK ratifies and implements the Withdrawal Agreement negotiated by Theresa May and the EU.”
He added: “Leaving the EU without a deal would give the UK total sovereignty over trade, borders and immigration but would mean the immediate emergence of new, expensive and disruptive checks and costs at the border for trade with the EU.
“It’s awfully concerning that over a third of retailers have done ‘little to no preparation’, or feel ‘very underprepared’ for a hard-Brexit when this scenario could unfold early next year.”