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Government admits ‘significant challenges’ to UK stock levels after Brexit

Tom Shearsmith
05 April 2022

A new Government report from the Office for National Statistics (ONS) has revealed the full extent of tumbling stock levels and broken global supply chains across the UK.

The new ‘Stock and Supply Chain issues in the UK’ report looks at the impact of Brexit, COVID-19, the blockage of the Suez Canal and other problems since 2020.

The report indicates that the retail industry has been hit particularly hard since the beginning of 2020. At the end of Quarter 1 (Jan to Mar) 2020, public health restrictions were introduced because of the COVID-19 pandemic which closed non-essential shops and stores and encouraged people to only visit essential shops where necessary.

In addition to public health restrictions that were implemented, retailers had to adapt to the UK's exit from the EU on 31 January 2020. With both of these events affecting the way businesses operated, many were unsure of their supply and demand and as a result experienced changes in the level of their stock.

Approximately a quarter (27%) of all wholesale and retail trade businesses paused trading from the 23 March to 9 April 2020 according to the Business Impact of Coronavirus (COVID-19) Survey (BICS). Many of those continuing to trade moved to online sales only.

Supply chains were also affected from the second half of 2020 because of HGV driver shortages and delays receiving goods from ports as retail businesses faced uncertainty. Pressures on supply continued through 2020 and into 2021, with little reprieve to supply chain issues and levels of uncertainty.

Quarter three would usually be a strong one for retailers as they begin to increase stock for the busy winter and Christmas period coming in Quarter four (Oct to Dec). However, this was not the case in 2021 as stock in the retail industry only grew by £380 million for Quarter 3 2021.

The international delivery expert ParcelHero says that the report reveals the full extent of manufacturing and retail problems. ParcelHero argues that manufacturers, retailers and their delivery and logistics partners will need to plan for a growth in reshoring (returning manufacturing back to the UK) as global supply chains break apart.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: "This week’s ONS report has laid bare the problems manufacturers and retailers had in maintaining stock levels during Brexit and the pandemic and reveals that they are continuing to experience difficulties.

"The report surely undermines the extraordinary claim by Jacob Rees-Mogg, Brexit Opportunities Minister, that Brexit is “already a success”, has been “extremely beneficial for the country” and that “the evidence that Brexit has caused trade drops is few and far between”. In compiling their report, the ONS received comments from businesses across a variety of sectors, including manufacturing, construction and retail.

"It’s little wonder that the long-established global supply chain model is crumbling. This might see a product carrying a British badge being assembled in the Far East using Chinese microchips, Japanese casing components and Russian palladium.

"Fashion has also responded swiftly. Ted Baker has introduced its Made in Britain range and, this year, Boohoo has learned from its previous supply chain woes and opened its own 23,000 sq ft factory in Leicester."

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