Chartered Institute of Procurement & Supply, CIPS, Comment on BRC report

Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, said: “Following Brexit, we’ve already seen an increase in supply costs as a result of the depreciation in sterling, which has in turn driven up prices for consumers. Businesses are largely managing this increase in supply costs by reducing their profit margins and increasing their efforts to secure a larger share in the marketplace. However, as clearing customs looks likely to become more difficult and costly for businesses post-Brexit, it could reach a point where companies are unable to take any more of the strain, forcing them to pass any further rise in costs onto consumers. The significant logistics challenges to supply chains caused by customs delays must be mitigated against at the earliest opportunity to reduce the risk of supply shortages.

“Retailers need to be able to prepare for any changes to the trade environment post-Brexit, but it is currently difficult for them to do so due to a lack of clarity around what the future will look like. One option businesses are considering to help manage the impact is switching to local suppliers where, according to our survey, over half (51%) of UK retailers who use EU suppliers are looking for British replacements. However, finding a suitable alternative may be difficult and could take a significant amount of time to do. Even if the government manages to negotiate a two year transition period, businesses are still likely to struggle.”