Brexit price rise see-saw

Suppliers debate challenge of Brexit

Leading KBB suppliers have shrugged off uncertainty over Brexit and claimed the situation is yet to significantly affect business.

Speaking exclusively to kbbreview in the build up to kbb Birmingham, most offered a defiantly upbeat message, claiming wider economic indicators suggested the impact of leaving the EU would be minimal.

“Clearly exchange rates and tariffs are going to influence prices and affect the economic stability of some companies,” admitted Graham Jones, sales and marketing director of Trend Interiors. “However, the underlying economic conditions are good and conducive to consumers spending on home improvements. Borrowing money has never been easier, mortgages are easy to get and unemployment is at a record low.”

Michael Dohmen, Nobilia’s head of sales for North East Europe, agreed saying the 18 months of uncertainty since the referendum “haven’t hit too hard” and that he was “very positive about the UK market’.

Meanwhile, Titus chairman Robert Appleby said the company “hadn’t noticed and don’t expect to see any major dramatic or rapid changes.”

“All our major competitors are based within the EU and the Eurozone,” he added, “so we are enjoying these benefits from the UK furniture industry.”

Howard Parsons, national sales manger with Brigitte Küchen, claimed the main industry challenges are “lower margins for the retailer, especially in the middle market”.

“There is of course the euro exchange rate and the possibility of VAT on imports from Germany,” he added. “But after Brexit this should level out and margins will rise. We don’t think it will affect us – except if VAT is added.”

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Rob van Steen, commercial manager at Keller, identified the rising cost of raw materials and energy as the biggest industry challenge. “But we’re confident good trade agreements will be concluded and that the departure of the UK from the EU will not affect business.“

Paul Crossley, MD of JT, agreed that the biggest challenge in the past 12 months has been the rise in raw material costs, “with some prices increasing by 22%”.

But, he added, “I’m sure I’m not alone in getting tired of the endless debate about the dreaded B word. The issue is we don’t know what the challenge will be. Our plan is to push forward and investment will still be vibrant.”

Franke MD Neil Clark admitted consumer confidence had been undermined by the Brexit vote: “Subdued consumer spending on big-ticket items remains the biggest challenge – just look at the 2017 car sales data,” he said. “Clarity around the future trading relationship with Europe would help the situation but is unlikely to be forthcoming any time soon.”

Meanwhile Craig Rothwell, MD of 2020 Technologies pointed to “the growing likelihood of trade agreements with non-EU countries and emerging countries, such as China and India”.

“This would lead to KBB trends, as well as products, being influenced by countries beyond Europe,” he concluded.

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