What a spike in toilet paper sales says about Brexit
While British lawmakers fumble through Brexit negotiations, sales of two items might hint at how the public is bracing for impact: toilet paper and painkillers.
On a recent earnings call, David Potts, chief executive of British supermarket Morrisons, said the chain had seen a “small amount” of stockpiling, and that sales of these two goods had risen more than 7 percent in the past year.
“We’ve seen quite a tick-up in painkillers and toilet rolls (sales),” Potts said, according to a Reuters report. “Whether that has any bearing on how people are feeling about Brexit, I don’t know.”
The specter of food and goods shortages after a no-deal Brexit has loomed over negotiations, as about a third of British food is imported from the European Union, and the prevailing sense of unease has manifested in shopping habits and retailer behavior. The British Retail Consortium reported a steep drop-off in February retail sales, as shoppers reined in spending to focus on essentials. The British government has instructed supermarkets to stockpile as many goods as possible, and has spent at least 23 million pounds on reserve supplies at military bases, Sky News reported.
“Uncertainty surrounding the UK’s imminent exit from the European Union has hit consumer spending,” said Helen Dickinson, chief executive of the BRC, in a statement. “If government wishes to reassure both the public and businesses, they should ensure a chaotic no deal … is taken off the table.”
Experts have warned that a hard exit from the EU could spell disaster for British consumers and businesses, as imports would be subjected to high tariffs set by the World Trade Organization in absence of an agreement between Britain and the EU. In late January, heads of competing supermarkets, Sainsbury’s, ASDA, Marks & Spencer, Lidl and Waitrose, as well as the British Retail Consortium, sent an open letter to lawmakers warning of “significant disruption” to supply chains in the event of a no-deal Brexit.
“We are extremely concerned that our customers will be among the first to experience the realities of a no deal Brexit,” supermarket leaders wrote. “We anticipate significant risks to maintaining the choice, quality and durability of food … and there will be inevitable pressure on food prices from higher transport costs, currency devaluation and tariffs.”
The timing of the Brexit deadline is particularly troubling, the letter suggested, because the bulk of Britain’s spring produce comes from mainland Europe, including 90 percent of lettuce, 80 percent of tomatoes and 70 percent of soft fruit. A lack of available warehouse space in Britain limits just how much supermarkets are able to stock up, heightening chances that supermarket shelves might wind up empty.
“Our ability to mitigate these risks is limited,” the letter said. “Retailers typically store no more than two weeks inventory, and it becomes difficult to restock stores if the supply chain is disrupted. We are also attempting to find alternative supply routes, but there are limited options and not enough ferries.”
A study published early this week by consultancy firm Oliver Wyman and law firm Clifford Chance found that a handful of industries – agriculture, financial services, automotive, consumables and chemicals and plastics – would bear about 70 percent of the Brexit impact. The study analyzed data from businesses around the EU and found that Brexit would cost exporters in Britain 27 billion pounds a year, and exporters in the EU 31 billion pounds a year.
Members of Parliament voted twice Wednesday to reject an exit from the EU without a sufficient withdrawal agreement. The votes suggest that lawmakers will have to ask European leaders for an extension, with the original March 29 deadline just weeks away.