NEWS EXTRA: CONFERENCE REPORT


to people yesterday and pretty much everyone agrees, that it is often said ‘if you can succeed in the UK, you can succeed anywhere’, and that’s great because if you want to learn about your business really quickly go and trade out in the UK, you will learn much quicker than in other markets.” A quote from a UK PurePlay


CEO read: “Brexit has brought an extremely high level of uncertainty which continues to be filled by contradictory news feeds - in my opinion this uncertainty is likely to continue until 2020.”


Clive Daley then put up a chart depicting business confidence and consumer confidence. He explained: “The blue line shows consumer confidence, and yes it was taking a bit of a dive before the vote, and it definitely dropped at the time of the vote, and in fact if you look more recently it started to tail off. “Now, what’s interesting is after the vote, business confidence picked up, if you’re not surprised I was. Probably because the doom and gloom of straight after the vote didn’t happen, business went on, the country still grew. But as you’ll see, it is now starting to drop off again, and I think the reason why both of them are impacted is because there is a gathering momentum of uncertainty in what the Brexit deal will look like, and in addition there are a number of businesses cutting jobs and cutting stores. “Well, I said I was an optimist, so I’d like to see that as actually preparing themselves for the future. Preparing themselves to be sustainable for the future, so there is a positive within that. “So, if you’re concerned about all the negative press that you’re hearing and reading, well, just don’t be too alarmed. I like to call the business press of the UK Brexit junkies, they’ve had so much content to talk about over the last years, what with that and Trump they haven’t had to work too hard.” “As for China and USA, they have historically used the UK as an aircraft carrier for business across Europe, where the UK has facilitated business across the rest of mainland Europe. And that boat has either already sunk, or it is on hold at best, and we have to accept that,” Mr Daley said.


Retailer/supplier relationships BHETA, which boasts 350 supplier members in the UK, were also approached by Clive Daley. “I asked Paul [Grinsell], ‘what was the impact for most of your members?’, and he said the most immediate negative impact from the Brexit


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announcement on suppliers was the devaluation of sterling against the euro and the USdollar.; forcing prices up, faster than wages. So, let’s take a look – was he right?” “We can see the euro has been impacted on the day before the vote, but there is a positive honeymoon period of benefit for exports and 24% of businesses in the UK grew their rates for last year,” Mr Daley analysed. “As for the dollar, what’s


interesting and important to note is that the dollar has a wave of motion to it, if you look at it over the last 10 to 15 years. 2016 was a low point in that wave and then after the vote it went lower, and yes now we’ve seen it start to pick up when really it’s only picking up back to where it was before, so does that make it a great result? It’s better – I’ll give you that.” Mr Daley explained how he had visited BHETA members last April in order to speak to them about the currency fluctuations. At the time he asked the members how many of them still have a problem because of the currency fluctuations, “I was surprised by the result because all but four suppliers said they still had a problem – this was 10 months on after the vote,” said Mr Daley. “And we talk about collaboration between suppliers and retailers, and I’ve been on both sides, and it is absolutely key, but we do have to sort some of the difficult parts of doing business and this hasn’t been addressed.”


“So, I thought I’d give them some practical solutions, and these were: make sure you backup your requests with data; don’t just say ‘the exchange rate has changed so I need to increase prices’, back


it up with data, build a robust, compelling proposition. In this instance, talk about what else has happened and build a story around it. Show that you have put pressure on your own business to reduce cost. Demonstrate on what you have done to reduce cost, new products, innovative solutions which drive efficiencies.” Clive Daley spoke to Nigel Fisher


from Yale, who said: “Brexit has, no doubt, had an effect on DIY in the UK and, from what I can see from my own business, prices on the shelf have had to rise – this is a problem universally for suppliers and retailers.” “We are in a situation of what I call ‘hidden inflation’, and the Bank of England won’t talk about this,” said Mr Daley.


“I was at a talk recently where they said inflation is levelling and I said what about the hidden


inflation that hasn’t been dealt with, and this inflation will only come through increases in prices again or new products being brought in at a higher price or through less promotions. It’s still an issue that needs to be dealt with, so under the umbrella of collaboration between retailers and suppliers and this situation, I think there is still work to be done.”


“So, in summary, my advice on this issue is that collaboration between retailers and suppliers is key. I would say it’s never been more important in the history of retailing.”


Are marketplaces the solution? Mr Daley also spoke to Euan Sutherland, former Kingfisher CEO, now at Superdry, and he said: “Brexit uncertainty is an unwelcome headwind for many UK businesses; we need significant additional investment which is not just customer focused. It’s time to diversify by geography and channel to mitigate these global shifts.” Mr Daley commented: “What’s


really interesting is that the UK government has a government funded department currently working with UK businesses to expand their business out of the UK through marketplaces, marketplaces being a quick and easy way to develop and build your business.


“I’m working with ManoMano at the moment, and they are smashing targets in France, Spain, Italy, Germany and the UK, with a refreshing route to market. I asked ManoMano’s founder Christian, what his view was on Brexit - so a view from France, and he said: “A different currency, a natural border, and cultural differences have always made business with the UK slightly harder. Brexit potentially creates more barriers and more complications and to be able to


work closely and collaborate with each other is so important, to grow and to prosper.”


“Based on this positive view


from mainland Europe, I spoke to Stephen Robertson who was previous MD for B&Q, now chairman of Retail Economics, and he puts it that the “UK government is very aware of the need to secure an excellent trading agreement with the EU and globally, I am sure that a mix of negotiation and just a little bit of fudge will take us to first base. Perhaps more importantly, the government will try to deliver a longer transition period to give time to iron out the gremlins for the benefit of both parties.”


“And what he is saying is, there is a positive here and we will crack a deal that’s close to what we have now, he believed,” said Mr Daley. “I was able to have some time


with Archie Newman, many of you will know him, chairman of Marks and Spencers, Hobbycraft and Lazard, he is advisor to Wesfarmers so he understands this industry, and important to the Brexit point of view he was a previous member of parliament, so it was an interesting conversation.”


And he said “businesses with the EU makes up 42% of exports, although the new regulations in the future may not be to our favour and possibly to our disadvantage, it’s important that we carry on and adapt when necessary.”


Mr Daley summarised his talk with: “The UK is open for business - it is a strong market. UK businesses are currently positioning themselves for the future, making those important adjustments. So, I thought I would finish with a quote of my own: “Due to Brexit we will have challenges, but often due to those trying times we will see business has changed, what they do and how do they do it. And they will find innovative solutions.”


20 JULY 2018 DIY WEEK 11


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