Bank of England Meeting | Reflections

Photo by Robert Bye on Unsplash

As you know, just over a week ago, I was invited to meet with the Bank of England. The meeting, organised as part of my work with the Genesis Initiative, was to provide a voice for our trade association direct into both central government and the Bank of England. These are very trying times, and these meetings are crucial to be able to really hammer home the enormous impact being felt on businesses by Brexit, changing consumer behaviour, the cost-of-living crisis and falling retail confidence. I want to thank all those who responded to the questionnaire ahead of the meeting in London – there is certainly a united struggle, and while we wait for direct feedback from the government, which I will share in due course, here is an overview of the picture painted from within our industry last week.

IMPACTS OF COVID

It seems safe to say that the Pandemic has left some lasting impacts upon many of our members. However, though buying habits have changed, Covid did force a change of business structure for many of our members with digital now increasing in importance and a multi-channel approach to reaching consumers now the norm.

Nothing can beat that in-person approach to sales, but it seems that sales agents are finding things much harder on the ground now and just as we were moving towards an improved customer confidence in the retail experience, that has once again been shattered by the cost-of-living crisis.

The doom and gloom is certainly not a full picture, however, with some of our members reporting up to a 1200% increase in turnover during the Pandemic period. I would love to hear more of these case studies, so we can share our successes and journeys through the various crises we are facing, in such a way as to support all our members and provide some potential insight into how to build a robust business that can sustain national and global economic turmoil.

IMPACTS OF BREXIT

The over-riding feedback from our members is that Brexit has been damaging for business, and international trade having to be sought in other markets. Many of our members, those who don’t have a well-established trade route in and out of Europe, appear to have ceased trading in Europe all together. The restrictions to the movement of goods, higher charges, and the red tape has made trading conditions all but impossible for many of you. I was very clear in the meeting that Brexit has to remain high on the agenda as solutions and greater trade support for our members has to be sought out and offered.

Sadly, now we have an unstable pound, and our GDP has an appalling growth forecast, mostly due to the Brexit handbrake (OECD already identifies as bigger than Covid), production and operation costs are much higher.

In the words of one of our members, “Brexit has been an unmitigated disaster for us.” So, as some in government, particular the former cabinet, celebrate the success of “getting Brexit done”, we have some work to do in really hammering home the disastrous impacts of Brexit and demanding change. Keep talking to us – we are being heard.

Finally…

I want to share with you one of our member comments, which summarise their personal situation, feedback delivered in its entirety to the Bank of England and MPs last week:

“The standard of living and energy crisis coupled with a post Brexit landscape present problems on many levels. Stockists ceasing to trade through high energy or rent costs and lower trading income. Higher energy costs and increase production costs for our business, disrupted trading areas with places such as Europe and beyond. National strikes have also hit us the posting out our autumn brochure was caught in a postal strike. Our recent shipping container was caught in the recent dockers strike holding it up for three weeks. These all had financial impacts added to this a rise of 500-700% in shipping costs and a fall in the exchange rate against the dollar price which we must buy to trade with our factory is a worry. The standard of living crisis and the fall of retail confidence again compound the problem, with the difficulty to find skilled labour it feels like SME's like ours are fighting on too many fronts. A cap on energy prices, any new trade deals will help, reduction of disruption and strikes will also help. A look at an overall of regularity rules in the shipping industry might help. If, aside from that, the obvious need to re-grow the economy and restore consumer confidence would be at the top of the wish list. One or two positive economic news stories wouldn't hurt. Anything rather than constant press doom-mongering!”

There is a strong feeling that the biggest threat to SMEs in our industry is lack of government understanding, strategic thinking and support for manufacturers and retailers. We return to government to continue these discussions and understand what the best route forward is soon, so please keep talking to us. As your trade body, we are here to support, to connect you with the support you need, to offer strategic guidance and to find a route forward. For a route forward is there, and we have to walk down it together.