Door Industry Journal - Winter 2016

Also online at: www.dijonline.co.uk 16 THE door industry journal winter 2016 industry news feature Brexit - opening or closing more doors for the UK? In this article Mark McEvoy, commercial director for Garage Door Systems in Ballymena explores what the ramifications are likely to be and what impact Brexit will have on Garage Door Systems and other businesses within our industry. The UK’s decision to leave the European Union continues to cause international turbulence, from currency fluctuation to stock market volatility. Whilst acknowledging I am by no means an authority on economics, I am, however interested in trying to understand what the ramifications are likely to be, what impact this will have on our business and the wider effects on other businesses and consumer spending. Like many manufacturing businesses within the UK a significant portion of our materials and products are sourced in Europe, America and beyond. The referendum result and the overnight devaluation of sterling have had a significant impact on our sourcing costs. The consequence is unprecedented, gross margin erosion far beyond the point of implementing a “close your eyes & wait and see” strategy and hoping for the best. The story unfolding..... Marmitegate Whist everyone I’m sure engaged with the Tesco vs. Marmite story to some degree in recent weeks, I believe the initial victory for Tesco, who are now seen as ‘the peoples’ champion, hasn’t kicked the issue into touch just yet. Basic economic principals will prevail and if it is costing manufacturing companies more to do business in the UK they are going to have to collect more pound notes for their products. These companies have investors and shareholders to account to. Perhaps a more realistic view was given by Justin King the former boss of Sainsbury’s at a recent conference in London. He said: “supermarkets would be unable to absorb the recent rise in the cost of importing goods caused by the falling value of the pound against the dollar and euro. Instead, said King, they would soon pass on the costs to consumers in higher prices”. Other significant commentaries in recent weeks are also noted: Mike Rake, the chairman of BT also recently updated that mobile phones and broadband home hubs were already 10% more expensive and that these costs would have to be passed on to consumers in the very near future. Apple & Electrolux Raise U.K. Prices in Brexit Christmas Pinch. The Brexit squeeze on U.K. consumers tightened at the end of October as Apple Inc. and Electrolux AB responded to the falling pound by charging more for their products in Britain. Apple quietly raised the cost of some of its machines including the “Mac Pro” by 20% overnight, while Sweden’s Electrolux said it’s boosting the prices of its home appliances by 10%.