If there is no upside to Brexit then a No Deal Brexit plumbs the depth of stupidity. And yet, two men who claim to be intelligent are currently racing to utter the most damaging nonsense and not bothering to hide the fact that they have no clue about what is going to happen. From “F**k Business” Boris to Hunt’s “destroying businesses and livelihoods is a price worth paying and I will look them in the eye and tell them that as they sign on the dole” (I paraphrase a little), we have people who do not understand the real world. A No Deal Brexit will destroy our supply chains. Brexit itself will mangle them badly (see my post from over three years ago on this). People will lose jobs, livelihoods and in the worst-case scenario, lives, if this no-deal rubbish goes ahead.
So why does Christmas matter? When Brexit was in March, retailers began to stockpile products as and when they could. You can do this for non-perishable products. But it comes at a price; this price is additional costs to businesses (and eventually consumers) from tying up capital in stock, a revised/ damaged cash flow, additional handling etc. and the cost of renting warehouse space. The March Brexit date approached, it became apparent such space was running out and thus, such a strategy became even more costly or impossible. The short term was sort of covered and muddled through with the real pain delayed.
And then we didn’t leave (hurrah)!
But we might leave at Halloween (boo, hiss)!
Now October is not March in so many ways, but in one special way for retailers. It is seven months closer to Christmas and for some retailers it almost is their Christmas. If they have not got their stock in place by October then they may never get it fully in place. And to do that they need warehouse space – loads and loads of it. And they need supply chains to work seamlessly.
The problem in this is sort of obvious, but last week retail leaders felt the need to begin to queue up to point to the bleeding obvious. If all our warehouse space is full with Brexit preparation stock then there is no space for the Christmas stock (and they are different). If it is not full, then it will be more expensive or difficult. If you wanted to pick the worst time for Brexit (yes I know any time is just the worst) then it is the end of October. Warehouse space will not be available and that assumes you can get the products into the country in the first place.
Christmas is of course the time of year that retailers see the main bulk of their sales and their profits. Get it wrong and the business really suffers or in many cases could have to close down. A bad Christmas can be business ending. Throw in a disastrous Christmas on a Brexit addled economy and you get a major catastrophe at individual, business and sector level. We’ll help, the politicians parrot; but ask them “how”? and they clam up. Clueless.
Our political clowns don’t care. “It’s soooo worth it,” they repeat on a loop. It’s not; it’s really not. Disrupt our supply chains to the extent proposed (without a care as well) and people will suffer big time. And I hope people wreak revenge when they can. These politicians deserve their comeuppance. And then when they are put out of their jobs, look them in the eye and say it is worth it. By then it will be.
Borders, tariffs, WTO etc. have had their moment in the Brexit shambles. But it is the scarcity of our supply that we should be worried about. Hence the renewed panic this month about medicines. And still we are nowhere near concerned enough.
I don’t think the answer is, as one of my colleagues proposed, to cancel Christmas on the basis it is too German or suspiciously continental. But the way it’s going it is far more sensible than the suggestions coming out of our politicians mouths.