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Following the vote by the UK to leave the European Union (EU) new research from Barclays has suggested that retailers in the country are looking to reduce the amount of goods they source from the EU and increase it in the UK and the Asia.
A survey of retailers found almost a third (30%) were considering changing suppliers, with 43% expecting to reduce sourcing from EU nations.
“Our survey shows that following the vote to leave the EU, sourcing from non-EU countries may grow in popularity, perhaps due to uncertainty around tariffs and trading agreements with the EU,” said Ian Gilmartin, head of retail at Barclays.
Gilmartin added that shifting sourcing to non-EU countries is an increasingly more attractive option due to volatile currency rates in the wake of the UK’s decision to leave the EU.
More than a quarter (28%) of respondents said they planned to source from different countries, with 52% expecting to increase their supply chain activity in India and 43% in China.
Domestic UK suppliers could also stand to benefit from this new supply chain initiative, with 32% saying they plan to source more from the UK post-Brexit.
“The currency moves since the referendum make this option more attractive for retailers, and it may also help them reduce lead times, with sourcing closer to home allowing brands to react more quickly to spikes in demand and challenges posed by unseasonal weather,” said Gilmartin.
Despite planning new supply chain strategies, more than half (52%) of retailers think their business is unprepared for Brexit. However, most retailers have said they plan to absorb costs into their supply chains rather than pass these onto consumers.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.