05 Feb 2019
Posted in Press Release
No-deal Brexit would lead to food inflation levels of over 5%, says GlobalData
In response to the BRC’s letter signed by major supermarkets warning that a no-deal Brexit would threaten the UK’s food security and lead to higher prices,
Thomas Brereton, Retail Analyst for GlobalData, a leading data and analytics company, offers his view:
“The supply chain chaos caused by a no-deal Brexit would force food inflation in 2019 to rise from 2.4%– forecast under a soft Brexit – to upwards of 5.1% as prices increase across core categories such as fresh fruit and vegetables.
“There has simply not been enough information provided by the government on how food prices, availability and regulations will be affected in the event of a no-deal Brexit. The just-in-time supply chain that UK supermarkets operate on means that there is not the specialist infrastructure in place to deal with stockpiling – particularly of fresh goods – and today’s BRC letter is a signal that retailers are losing patience with a lack of information coming out of the Brexit negotiations.
“Fresh fruit and vegetables are among most vulnerable product lines; with retailers acknowledging that the combination of high EU dependence and the inability to stockpile these products will likely lead to shortages and price increases.
“While the supermarkets are currently engaged in price wars – somewhat driven by the exceedingly successful proposition of the discounters Aldi and Lidl – it will be difficult for retailers to stop prices shooting upwards if import costs rise as much as speculated.”