UK plc may be damaged goods for some but misfortune has a habit of presenting opportunity, which is why Continental retailers should act fast.
A lot of people lost a lot of money on Friday and it’s likely more will be lost before the ‘short-term pain’ of Brexit evens out into a new normal. For most of us, however, any pain will still be some way away and for the moment things continue as abnormal.
If shoppers were a little apprehensive before last Friday, that sense of unease about spending is likely to be moving towards near panic about savings and how they might be preserved. For retailers this particular scenario looks tricky and one of the issues likely to come under close scrutiny this week will be whether to cut back on store refits, new stores and new formats. It is almost certain that much will be put on hold while the situation is assessed and there will be an inevitable rush to preserve capital (where there is any).
Practically, this means that retailers behave in a similar manner to individuals. When dark clouds gather, head indoors, hole up and wait for the storm to blow over. And maybe this is the right thing to do, but probably not. There will be light at the end of the tunnel eventually, even if the road out is a little straitened compared with the highway on the way in.
“There will be light at the end of the tunnel eventually, even if the road out is a little straitened compared with the highway on the way in”
And, as ever, misfortune presents opportunity. Look on the bright side. The pound has crashed and companies are worth less. But this does mean that we are cheap to buy from and shopfitters and store design businesses would do well to focus on Europe rather than trying to cope with a temporarily toxic domestic climate.
The big question is whether, even when prices are cheaper, our European neighbours will feel minded to reach into the coffers. Money has a tendency to win out in the world of commerce (although it appears not to have done so in this country) and we may find that our store design industry finds plenty of takers. As a sector, it was considered pricey but worth it by many Continental retailers and even in the short term this may still be the case, now that buying from here is less expensive.
But act today if you are a Continental retailer – UK plc may look like damaged goods currently, but this may not always be the case. Who’d have thought we’d be where we are this morning at this time last week?