Some of Britain’s biggest and best-known retailers have admitted they’ve done “little to no” preparation for a hard Brexit, a new survey has revealed.
Several huge brands, which together employ tens of thousands, said they had done little or “felt very underprepared” in the event of the UK crashing out of the EU without a deal.
The survey of 26 retailers, which had a combined turnover last year of £100bn, found a third had few plans to cope with a no-deal scenario.
Worryingly, almost all of the businesses surveyed said they had not been directly consulted about Brexit by the government.
It comes as a growing number of MPs threaten to vote down Theresa May’s proposed withdrawal agreement next month. The UK is due to leave the EU on 29 March, 2019.
The retailers, which account for more than 30% of the UK market and which either operate on the high street, online, or both, were asked about their Brexit plans by consultancy Retail Economics and law firm Squire Patton Boggs on the condition of anonymity.
A majority of the companies said they had conducted “some analysis” on how new tariffs and charges might affect pricing, but few said they had concrete plans to avoid new costs.
Those surveyed said the top three issues regarding Brexit were logistics, staffing availability and costs, and new tariffs.
The survey also revealed how the retailers are seeking to mitigate any risks posed by Brexit – with some bringing manufacturing back to the UK.
Stockpiling, currency hedging and hiring more temporary staff were also cited as measures being explored to reduce costs.
Richard Lim, of Retail Economics, said: “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.
“Retailers identified disruption to supply chains, labour availability and tariff costs as their three biggest concerns of a no-deal, yet just two in five said that they had identified any way to mitigate against these additional costs.”
Matthew Lewis, of Squire Patton Boggs, said: “Retailers are considering stockpiling and changing supply locations as ways of mitigating the impact but they all recognise that increased costs are inevitable.
“The debate about the withdrawal agreement continues in earnest, as does the uncertainty all this brings. The actual outcome should become clearer within the next few weeks.
“However, despite the UK’s Brexit deal being agreed by EU leaders, in light of the political dynamic, contingency planning for no deal has to be a priority.”
But a government spokesperson said ministers regularly meet with retail representatives given its “vital and valuable” role to the UK economy.
“We do not want or expect a no deal scenario, but we have been developing plans for all possible outcomes,” they said in a statement sent to HuffPost UK.
“This includes publishing over 100 technical notices explaining to businesses and citizens the practical steps they would need to take in this scenario.”
The British Retail Consortium (BRC), which represents many big-name brands, said Brexit planning amongst its members was well underway.
“We have found no-deal Brexit planning is more advanced than might be suggested,” the BRC’s Andrew Opie said. “Certainly we have been working with our members and the government for many months on this issue. However, there is a limit to the planning retailers can do.”
The retail sector has suffered soaring costs as a result of currency fluctuations brought on by Brexit, increasing the cost of many goods produced abroad and all but decimating profit margins.
Dozens of well-known brands are reportedly teetering on the brink of collapse as costs mount and as online rivals hoover up customers.
Crisis-hit department store Debenhams had its worst ever day of stock market trading earlier this month, amid reports it was struggling with suppliers ahead of Christmas.
Meanwhile accountants KPMG said on Wednesday that they are still being approached by panicked bosses of big FTSE 100 companies for assistance in preparing for Brexit.
“Last week we heard from a FTSE 100 [finance director] who said ‘help, we’ve had our head in the sand, we need to start planning’,” KPMG’s James Stewart told a conference.