For many, the EU referendum result will still be sinking in - with the only thing seemingly certain being uncertainty itself. Yet this is no time to wait and see. Businesses need to review their operations, strategy and subsequent approach as details of our exit from the EU unfold.
Indeed, executives need to look through a different lens - thinking beyond immediate supply chain and distribution channels in order to fully ascertain the impact of Brexit. We are advising clients to take a 2:2:2 approach - plot the next two weeks, two months and two years.
This reassessment could throw light on some material issues. Such foresight will be vital when working with trade bodies to lobby during the negotiation. This is particularly significant given that any changes to tariffs from the current free trade position are likely to have a negative impact on already squeezed profit margins.
In an industry that relies on non-UK EU workers more than most, how will businesses support those currently employed? Close attention also needs to be given to turnover levels and whether the overall talent pool will be smaller if migration is restricted. Perhaps more important in the short term, and certainly more predictable, is the impact on consumers. With a weaker pound, higher inflation and mounting pressure on earnings, UK consumers may well start to feel the pinch. In addition, according to the NFU, as much as 40% of the food the UK consumes is imported. So we are likely to see increased food prices and the trend towards discounters and own-label products may well be further reinforced.
It is therefore imperative that companies don’t lose sight of their central strategies and continue to focus on customers.
Nonetheless, the immediate need to re-examine business plans and strategies in the light of the decision could offer scope for shaking up the way you operate. Perhaps it’s an opportune moment to give the start-ups and disruptors who were already looking to take market share a run for their money.
There are risks, but also opportunities. Those that succeed will be those that plan comprehensively and adapt quickly.
Liz Claydon is KPMG’s UK head of consumer markets
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