Brexit: Supermarket Shake-up

Emma Hogan 13 March 2019

This month we’re researching all things Brexit and today we’re looking into just how Brexit will shake up the daily, weekly, monthly grocery shop.  Will you be paying more? Will you still be able to find the goods you want?

In January, the government received a letter from some of the UK’s leading grocery retailers (Morrisons, Sainsbury’s, Asda, Waitrose, Marks & Spencer and the Co-op to name a few), outlining their fears over how a no deal Brexit may impact our supermarket shelves.  They highlight increased wholesale and import prices (increases that would need to be passed on to the shopper), a reduced product range and a potential need to accept a lower quality of fresh fruit and veg in order to keep the shelves well-stocked due to the inability to stockpile fresh foods and increased import times.

With this week’s vote on Brexit having failed to win over MPs, the prospect of a no deal Brexit is suddenly very real.

Want to know more about how your grocery shop might be effected? Read on.
 

Logistics

From the early 2000’s Just In Time production (JIT) has been common logistical practice for our supermarkets. Just In Time essentially means that products, including fresh foods, are delivered to supermarkets just before shelves are due to be restocked. 

What does this mean for us? 

Just In Time means that supermarkets need less warehousing space as there’s no need to stockpile goods.  So how does this benefit us?

  • This lack of stockpiling goods means we as shoppers get fresher products, from fruit and veg to the tin of Heinz tomato soup you keep tucked away in the cupboard for emergencies.  Instead of being sold a tin that has a best before date of a couple months down the line, the likelihood is you’ll have up to 24 months before it starts to deteriorate.
  • Just in Time also helps to minimise food waste.  Supermarkets buy only what they need so stock forecasting is generally more accurate than it would be if purchases had to be ordered further in advance.
  • Not having to own additional acres of warehousing space means supermarkets can keep their costs lower.

But with a no deal Brexit around the corner, Just In Time is going to be almost impossible for our supermarkets to stick to.

  • A lack of available warehousing space in the UK, think refrigerated areas as well as warehouse palettes of dry / tinned food and household goods, means we have limited facilities for stockpiling.
  • Potential increased import timelines for goods (think Spanish fruit and veg that we rely heavily upon), will mean forecasting has to be done further in advance so stock predictions may be less accurate.  Ordering in excess will lead to food waste and higher prices as supermarkets try to recoup costs, whilst order too little and the shelves may become bare before the next shipment arrives.
  • Calais is currently a key EU import route and additional border checks could mean huge delays and bottle-necking as freight is checked in both directions.  Any problems at Calais could mean substantial problems for stock levels on our supermarket shelves.

 

Variety

What about the French brie we love so much?

For all the cheese lovers out there, don’t worry, we’ll still have cheese! What we might struggle with is keeping the supermarket fridges stocked with all the varieties of cheese that we’ve grown accustomed to from French Brie to Italian Marscapone.

Goods arriving from the EU will now be subject to additional checks (and potentially tariffs depending on the product type), increasing the time from production to UK shelf.  This may mean that supermarkets offer less variety e.g. by limiting or not stocking goods with low demand or those with limited shelf life in order to keep costs and waste down.
 

Quality

Granted, our tomatoes probably won’t look as bad as this ^^!  But it’s a very real possibility for fresh goods – especially fruit and veg, that we’ll have to accept lower quality as the norm in order to keep our shelves fully stocked.  But when is lower quality actually lower quality? The aesthetics of fruit and veg don’t normally affect their flavour / texture.

Luckily for us there’s been a real surge in the acceptance of less than perfect fruit and veg – remember ‘Hugh’s War on Waste’ ? This was the BBC documentary that highlighted the bushels of carrots and parsnips that were wasted each year because they weren’t aesthetically pleasing.  We’ve embraced wonky veg and it’s now available in all the major supermarkets at lower prices compared to their perfect siblings.  Fancy 1kg of carrots? For picture perfect root veg you’ll spend 60p at Morrisons today.  Don’t mind a wonky carrot? You’ll pay just 50p.
 

Price

This is a tricky one.  We already know that the value of the pound is expected to fall.  Couple this with additional tariffs on imported goods, previously zero-rated as per EU free trade agreements (product dependent), the cost of your supermarket shop is likely to rise.

In December, the Bank of England warned that Brexit has the potential to increase your weekly shop by up to 10% in the event of no deal as retailers seek to mitigate their increased cost of sales. But, bear in mind that the temporary tariffs that the government has outlined does retain zero tariffs on the majority of items.  Items that we tend to be self-sufficiently producing i.e. milk, eggs etc. are unlikely to be affected but this will be down to the retailers to decide.

How do you feel Brexit may impact our grocery shopping? Are you worried? Share your thoughts with us on Facebook, Twitter or Instagram.

Want to have your say on more issues that effect your everyday life? Sign up to LaunchPanel to earn cash rewards for sharing your opinions.