Last year, a British Retail Consortium (BRC) report suggested that the retail prices of furniture imported from outside Europe could fall following Brexit, if the UK can manage to lower tariffs and agree new deals with importing nations. We asked our retail feedback panel to answer the following questions:
How much of your offer comes from outside Europe? How has its pricing changed, and why? Are you exploring new import opportunities? Do you see any likelihood of being able to reduce your retail prices after Brexit? What are the other factors influencing your pricing strategy, and how are you responding to them?
Steve Adams (MattressOnline): If only we had a crystal ball. As a country we must embrace the opportunities of Brexit – I firmly believe that with the right negotiation then yes, our imports can become more competitive, offering our customers a better deal.
We’re not likely to see much direct benefit ourselves, as the majority of our products are sourced from the UK.
In general, our prices have been creeping up in line with manufacturer price increases. We pass these on to our customers, and I’m pleased to say this has not had a negative impact on our customer acquisition.
Steve Pickering (Sussex Beds): Nobody really knows how pricing will be affected post Brexit – up or down. We currently don’t import much directly from outside the UK or Europe. However, indirectly, our suppliers import many materials and/or items, therefore it is a concern as to the outcome and the deals and tariffs which are agreed.
Our pricing will follow the trends and movements from suppliers, which will be dictated by the outcome of the Brexit negotiations.
Royce Clark (Grampian Furnishings): The Brexit news was encouraging at first, but in reality it has affected every manufacturer and importer with the uncertainty surrounding exchange rates, price of foam and many other factors, resulting in several price increases from every supplier.
I think every one of us is watching and waiting for some positive news from the Brexit negotiations – how this develops over the next couple of years will certainly have a huge effect on the future of many businesses.
Ross Beveridge (Archers Sleepcentre): Currently, around 21% of our total product offering comes from outside Europe. This is the area in which we have witnessed the most price increases following the vertiginous drop of the pound.
For us, the pricing structure remains unchanged, in the sense that margins have been protected, with retailers having no choice but to pass the increase on to the consumer. Certain product lines have undoubtedly become casualties due to these increases, with the challenge being to find replacements when this is the case, and we have been able to achieve this when required.
The introduction of lower tariffs will only lead to a reduction in retail prices if suppliers and importers are forthcoming with cost savings at their end – should that be the case, then I do believe you will see this reflected in the prices, and in most cases savings will be passed on to the consumer as the need to remain competitive will not disappear. This could lead to an increase in imported products once again, with the cost gap widening from UK manufacturing.
Read the full Year in Review feature in the January 2018 issue of Furniture News magazine.
