Retailers should collaborate, not compete, to cope with Brexit chaos

I have previously avoided the topic of Brexit, but now it seems there’s only one show in town. I always expect the grocery industry to take the lead and set an example, but we seem to be blowing the opportunity to do so with a lack of collaboration.

Joint business planning (JBP) is a honed capability in our beloved sector and I would say globally the UK leads the world within food. JBP at its best is the ultimate in collaborative problem solving and develops breakthrough returns for all parties who commit to it. At its worst though it’s just another way for suppliers to be pressured out of more margin on a promise of greatness. Nevertheless, collaborative planning is a capability that is uniquely present in supply routes to the UK consumer.

Without a doubt we could plan our way to minimise disruption and there is no need for anyone to die of ‘hard Brexit’. Retailers, however, are not leading the necessary collaboration across the industry, either because they don’t see a real problem, or because they are following a selfish competitive strategy. The FDF’s call for a relaxation in the competition law is the first sign of an attempted industry approach. The intention was to co-ordinate the supply chain to ensure food groups reach all pockets of the country though sharing intelligence. 

Removing the fear of prosecution for such planning is an obvious start point, but it will not help because retailers will not fully engage. I can only conclude they view this as an opportunity for their competitors to mess up and allow them to steal shoppers in the disruption. It’s a huge traffic building opportunity and sharing their preparation plans would not be part of that strategy. Instead they share a view of disrupted supply through the media. We already know there’ll be disruption and of course big successful businesses will prefer the status quo in which they already succeed. CEOs, however, only got one vote in the referendum and their employees on balance went the other way.

If retailers were serious about avoiding disruption, the collaboration would include: agreeing a ban on promotional activity, sharing consumer switching patterns within key food groups, limiting range choice on essentials, allocating freezer storage and goods across retailers et cetera. Speaking of which, Halloween ranges are not being compromised, never mind Christmas. If retailers were really looking for a solution to potential Brexit supply issues, these ranges would be the first to be scaled back. 

The most difficult foreseeable issue at store level in my view is panic buying, which again would be easier to control if the approach was co-ordinated across all retailers and all tills.

This competitive approach they are taking is futile, as despite the mults’ data intensity and storage capacity, discounters will benefit most due to the simplicity of their operations – and no doubt get another share boost.

Business must do its thing and respond to the opportunities rather than promote the complexities. When JBP is at its worst, the suppliers pick up the bill. Let’s just hope retailers’ competitive approach to our EU exit doesn’t have the same result.

Sentinel Management Consultants deliver sales, negotiation, planning and finance training courses for our clients worldwide.