IMAGE BY TWEEDLAND
Report: British retail exports to EU fell six
billion pounds post-Brexit
By Rachel
Douglass
22 hours
ago
New
research has shown that international sales to the EU by British brands and
retailers have fallen by 5.9 billion pounds since the introduction of Brexit,
with uneven impact seen across categories.
Among
non-food exports, Clothing & Footwear has been one of the most impacted
categories, with exports declining from 7.4 billion pounds in 2019 to 2.7
billion pounds in 2023.
This is
according to research by economics research consultancy Retail Economics and
D2C e-commerce platform Tradebyte, which said that the sharp drop in clothing
exports have put “considerable pressure on brands and retailers lacking the
necessary expertise, resources or financial capacity to navigate the
complexities of the new regulatory landscape”.
In their
report, the duo noted that while online retail is anticipated to add 323
billion pounds of annual sales to EU economics, “Brexit-related complexities
are curtailing this international sales opportunity for UK-based brands and
retailers”.
Challenges
include heightened logistics costs, complications in registering an EU trading
entity and an increase in delays in a competitive market.
In a
release, Richard Lim, CEO of Retail Economics, said: “The profound shift in the
UK’s trade relationship with the EU has hit British brands and retailers hard.
“Successive
waves of disruption caused by Brexit and the pandemic have significantly
disadvantaged UK exporters who are having to navigate through increased
friction and cost.”
UK clothing sales to EU plummet as Brexit red
tape deters exporters
Small and medium-sized firms badly hit as huge drop in
apparel sales helps fuel 18% slide in all-non food exports
Phillip
Inman
Wed 5 Jun
2024 00.01 BST
UK exports
of clothing and footwear to the EU have dived since Brexit, according to a new
study that shows the extent to which complex regulations and red tape at the
border have deterred firms from sending goods across the Channel.
Exports of
clothing and footwear sold to EU countries have fallen from £7.4bn in 2019 to
£2.7bn in 2023, helping fuel an 18% slump in sales of all non-food goods
exports to countries covered by the EU single market, according to the
consultancy Retail Economics and online marketplace Tradebyte.
The report
said the decline meant British brands and retailers have seen sales to the EU
plummet since Brexit, despite a flourishing European e-commerce market.
The only
sectors to increase export sales over the same period were health and beauty,
and DIY and gardening, offsetting some of the fall from clothing and footwear.
Many of the
worst affected were small and medium-sized businesses, which faced a larger
relative burden from red tape than multinational firms.
One of the
report’s authors, Richard Lim, head of Retail Economics, said some of the fall
was simply down to a change in trade routes. UK firms that previously
repackaged imports of goods made in Asia for sale in the EU have now
reorganised their supply chains, by setting up offices inside the single market
to bypass border regulations.
However,
red tape has forced many producers making apparel in the UK to move
manufacturing to an EU country, at a cost to UK skills and jobs.
In one
instance a sock-maker based in Leicester, which declined to be named, has
shifted production to Italy, ending more than 100 years of manufacturing in the
east Midlands, Lim said.
The UK has
also failed to benefit from a boom in online goods sales in the EU since 2019,
the authors suggest.
“Online
retail is estimated to add £323bn of annual sales to EU economies, but
additional trade frictions caused by Brexit-related complexities are curtailing
this international sales opportunity for UK-based brands and retailers,” the
reportstated.
Lim said:
“It is a huge opportunity for UK brands that is not being grabbed.”
He said the
fall in the value of trade with the EU was softened by last year’s spike in
inflation, which increased the cost of goods for export.
A separate
report on Tuesday by the thinktank UK in a Changing Europe found that while
exports of goods had declined, services exports had increased by nearly 30%
compared with February 2020.
It said
analysis of recent official figures showed that the UK’s services trade “has
not only bounced back swiftly after the pandemic, but also exceeded
pre-pandemic levels by the latter half of 2022”.
It added:
“This growth has been driven by ‘a boom’ in the UK’s trade in business
services. This sector, which includes legal services and consultancies, has now
overtaken manufacturing and transport equipment (including cars) to be the UK’s
largest export sector.”
The UK’s
exports of services had remained resilient over the period 2020 to 2023 while
services exports by France and Germany had declined.
Why UK
services firms had increased sales when they were largely unaffected by Brexit
rule changes, was unclear, the report said.
Rain
Newton-Smith, head of the CBI, said there was a case to review the UK’s trading
relationship as she set out the business lobby group’s wishlist ahead of the 4
July general election.
Newton-Smith
called for a “bold pitch” to international investors and said Britain and the
EU should use a review of their trade deal in 2026.
“That will
be a moment for us to think about how do we improve and how do we minimise some
of those trading frictions that are having an impact on business,” she told
Bloomberg.
Labour
leader Keir Starmer has said he will align with the EU on food and agricultural
products if he becomes prime minister. But he has ruled out rejoining the
single market or allowing freedom of movement between Britain and the EU.
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