KBB retailers are still optimistic for the year ahead despite new concerns that soaring shipping costs may bring price increases further down the line.
The EU trade deal allayed many of the worries retailers had, but fears remain that the reported increases in shipping costs and extra red tape for goods entering the UK may cause price rises and supply chain issues going forward.
After four years of uncertainty, fears were running high among UK KBB showrooms that import tariffs would lead to wholesale price increases and so put a dampener on sales, which have enjoyed an unexpected boost after consumers not spending on holidays and commuting during the first lockdown channelled funds into home improvements instead.
In the latest survey of our kbbreview100 panel of retailers, 93% of respondents said that they were optimistic about business post-Brexit.
Contrast that with the survey of our kbbreview100 we conducted in early December last year, when almost half (44%) saw Brexit as one of the biggest challenges the UK would face in 2021.
Our survey also showed that 93% of respondents were still concerned about ongoing supply chain issues and almost all (97%) of the kitchen retailers polled had concerns over appliance shortages and the same number admitted buying product online to complete projects.
Richard Hibbert, proprietor of KSL in Sudbury, Suffolk, and national chair of the Kitchen Bathroom Bedroom Specialists Association (KBSA), said: “The Brexit deal is very welcome and takes away the threat of significant tariffs, which is a huge boost for independent retailers. There may well still be some price increases to come, but at the moment it is early days, and all of the details are not yet known.
“We have all had to adapt to changing circumstances over the past 12 months and the Brexit deal means there is more to come. It is unfortunate that, after so many delays, the Government urged businesses to get ready with only weeks to go, and then the deal finally came a few days before Christmas.”
He concluded: “It will be some time before we can assess the impact. In the meantime, it is business as usual.”
Derek Miller, co-owner of Scope Bathrooms in Glasgow was also upbeat about the trade deal: “As the co-owner of a business that procures a significant number of products via the EU, I had been concerned about the implications of the UK leaving the trading bloc as the majority of these products come to us from the UK subsidiaries of European manufacturers. The potential effect on our business would have been price increases and, more significantly, delays caused by customs complications.
“The prospect of a no-deal Brexit and lockdown-led stock shortfalls was unimaginable. The fact that a free trade deal has been hammered out, with no tariffs or customs difficulties, is the main thing for the KBB sector. On that basis, Brexit is unlikely to hugely affect our industry in the short to medium term at least.”
Kristjan James Lilley, sales manager at H Lilley & Co in London, was also upbeat. He says: “Brexit has been a very long and exhausting discussion and I am pleased it is over and look forward to trading as usual. I am positive that if we can put the next issue, which is Covid, behind us, then it should be a prosperous year.”
Ian Coghill, a director at Riddle and Coghill in Edinburgh, is also positive and advises honesty with customers on the subject: “A deal has been done, we are all working many weeks ahead of ourselves and can, to an extent, warn clients about the possible upcoming difficulties/shortages. Honesty is still the best policy. Be upfront and explain the industry issues before they bite – that way clients are a lot more understanding.”
Nathan Damarell, proprietor of KF Kitchens in Plymouth, said his only concerns were about the unknown: “As an industry, we have not had time to plan, as we did not know what to plan for. I think lots of companies became apathetic with regard to Brexit, with the pandemic dominating our short-term plans. We will have to do what is needed and hope our larger, global suppliers can limit the damage.”