What Does Brexit Mean For Consumer And Tech Industries?
Industry needs visionary leaders in this time of instability
We may be in for a rough ride but we should remember the tech industry we are now intertwined with, was borne out of the very notion of “disruption”
On June 24th we woke to the news that defied our industries plea to remain an EU member state. Earlier this week we polled CEOs, Founders and Directors of businesses from the consumer sectors and found that 82% of them were in the remain camp.
This was indicative of businesses exercising a vote for stability and the requisite time to acclimatise to an already challenging market and digital disruption.
Consumer industries including Retail, Tech, Fashion and Hospitality have benefited from attracting talent from Europe. This trend has extended to manufacturers and those in supporting functions such as warehousing, logistics and supply chain industries. Employers value this high quality talent, whether at the ‘coal-face’ or at board level. We implore the government to reassure companies and employees alike that they will ‘make safe’ in what is a trying time.
Whilst it may not be directly obvious a devalued sterling against the dollar in particular will impact on retail pricing and potential inflation. If you buy most of your stock in dollars and you haven’t hedged currency, there is potentially a naturalised price increase. Not easy if you are at the value end of the market and cannot increase your prices….or have to increase them to maintain margin. The consequences of getting the calculations wrong are potentially cataclysmic.
July update: It has been reported that UK retailers with a strong international online presence may benefit from Brexit, as the weaker sterling makes British firms more attractive in the global market. This presents a possible opportunity for exporters and those looking to attract overseas shoppers.
Many businesses consider themselves culturally Global and have a distinct international (without borders) feeling to them. This has been a growing dynamic and fuelled by the tech and fashion industries need for Global Talent and the UK’s ability to source European talent easily.
How will these populations feel about the UK’s decision to remove itself from Europe? Will they shift to countries deemed more “international” or open to diversity? There is a palpable shift in the cultural mind-set, if we accompany this with financial incentives from ‘Europe’ to relocate, will the UK’s position encourage relocation to environments that are more international and potentially tax friendly?
63% of those surveyed in our poll had no immediate contingency plan. Baden-Powell no doubt is rolling in his grave, but many of our respondents suggested that it was difficult to predict the real effect on businesses before new agreements are in place and that any plan would be based on speculation.
Paul Kendrick, Director at Findel and formerly Bonmarché commented “The major impact will be exchange rate fluctuations which will need to be managed”. This has been played out as currency and stock markets fluctuated.
We may be in for a rough ride but we should remember the tech industry we are now intertwined with, was borne out of the very notion of “disruption”. Our hope is that as a nation and as consumer industries, we will make opportunity out of perceived adversity and use this as a platform for long term growth.
What is certain is that the requirement for visionary leaders that innovate, collaborate, exercise empathy and have the intellectual horsepower to drive change will be essential to the survival and growth of our sectors.
We would love to know your opinion on some of the questions raised in this blog;
- Do you believe our position will encourage some UK based, international businesses to relocate to countries within the Common Market or even further abroad?
- How are you affected by the currency dynamics?
- Would a restriction on free movement across Europe affect your business’ ability to secure the best talent?
Email me for more insight.