Retailers and consumers could feel the pinch from Brexit
Tuesday 10 October 2017
DR JONATHAN Owens, an expert in operations management from the University of Salford Business School, comments on fears raised by the British Retail Consortium (BRC) that prices could rise and deliveries become slower if the UK doesn’t retain access to EU workers after Brexit.
Dr Owens said: “Six percent of retail industry employees are EU nationals, just over 170,000 people. We could ask ourselves, why worry, because these numbers are still very small in comparison to the UK working population? We should be very concerned, though, because well over a quarter of these are working directly to support and run the UK’s retail supply chains. A survey by the BRC showed that fifty six percent of retailers have EU workers who are concerned about their right to remain in the UK, in addition twenty two per cent of UK retailers reported that some of their workers from the EU have already made their choice, by leaving their jobs and returning home.
“If this number starts to snowball as has been suggested, then before the end of 2017, this could deal a devastating blow for the UK’s retail supply chain. The impact of this may already be starting to bite, with UK productivity falling for the second quarter in row. The Office for National Statistics (ONS) suggested that although UK employment rates were at record levels, and there was an increase in total hours worked, the gross value added increased at a slower rate. This could be correlated with the above point in that changing and loss of immediate short term skills of the UK workforce. If this is the case, then there is a very real and serious inherent problem facing not just the UK retail supply chains, but the UK economic situation in general.
“This very real and alarming reduction in the UK’s retail supply chain workforce, particularly as this sector is working hard to recruit extra capacity in the build up to Christmas. The immediate knock-on impact of this reduction in labour will almost certainly be higher costs of the product retailed. The most significant outlay will be associated with the higher costs of replacement workers (from somewhere) to fill the gap.
“Our vote to leave the EU has created this insecurity in our retail supply chains. It was some sixteen months ago that the Brexit result was announced. From an ethical viewpoint is it right that these people who contribute so significantly to the UK’s economy still do not have the assurance and security they need to continue with their lives here in the UK? Yes, the ‘settled status’ offer is a move in the right direction, but much more information is needed to create a feeling of calm and stability for these workers.
“It is a crucial and important point to recognise that free movement of labour from the EU is coming to a swift conclusion. This was after all, the key area that was hotly debated by the leave campaigners leading up to that all important vote on 23rd June 2016. Therefore, we need urgent and constructive conversations lead by the UK government, in order to discuss how we will provide real and continued long term structure to the country’s retail supply chain.”
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Sam Wood
0161 295 5361
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