A survey of retailers carried out after the EU referendum, shows that many are already reviewing how their supply chains operate, as a result of the vote to leave the EU. Retailers are looking to build more efficient supply chains (76%), and are considering changing suppliers (30%) and sourcing from different countries (28%).
 
In a potentially positive sign for the British economy, a third of retailers (32%) predict that they will source more from the United Kingdom, with only 12% expecting a reduction. Asia could also be a winner; 52% expect to increase supply chain activity in India and 43% in China. Consumers can expect to buy more products with an African supply source (38%), but Europe fares less well, with 43% of respondents anticipating a reduction in what they source from the region.
 
Commenting on the findings, Ian Gilmartin, Head of Retail & Wholesale at Barclays, said: “Getting your supply chain strategy right can be the key to success for retailers. It’s a mixed picture, but there are some encouraging findings in our post-Brexit survey. Retailers are not overly pessimistic about the impact of the vote on their supply chains, and yet they are still thinking carefully about what they need to do now, in particular with regards to which regions they source from and their foreign exchange strategy.
 
“It’s also reassuring to note that most retailers don’t intend to pass on costs to their customers and will instead look for other ways to tackle supply chain issues. The really significant news is that a third of retailers surveyed intend to increase domestic supply chain activity. At a time when we’ve all got to pull together to encourage growth in the UK this is a very positive sign, and at Barclays, we’re committed to doing all we can to support our clients with their supply chain strategy and to help businesses thrive.”
 
There are mixed feelings amongst retailers when considering the effect of the referendum vote on their supply chains. Although half (52%) think that their business is unprepared for Brexit, a small majority (56%) actually think that Brexit will have no real impact (41%) or a positive impact (15%) on their supply chain.
 
Cost management was already high on the agenda of finance directors before the EU vote. However, there are some reassuring findings on the cost implications of the referendum result, as most retailers (59%) expect supply chain costs to remain the same or just increase slightly. Consumers will also be relieved to discover that only a third of retailers (31%) expect cost changes to result in price increases for customers.
 
As might be expected following the recent moves in the currency markets, foreign exchange concerns are high on the list of supply chain considerations. Four in five retailers (81%) expect the effect of Brexit on foreign exchange rates to have a negative impact on their supply chain and 70% will be reviewing their currency hedging strategy in light of the referendum result.