Larger suppliers escape Brexit hit

Hedged dollars help to avoid impact of weakened pound

SOLEX: Suppliers split between those offering prices now and those holding off hoping for sterling to bounce back
SOLEX: Suppliers split between those offering prices now and those holding off hoping for sterling to bounce back

Larger suppliers seem to be benefitting from Brexit because they are more likely to have hedged dollars and are not suffering from the weakened pound caused by the vote to leave the EU on 23 June. Suppliers at SOLEX were split between those offering prices now and those holding off until Glee in September, with the hope that sterling might have bounced back by then.

La Hacienda director Simon Goodwin said he is looking for sterling stability. "If it stays as it is there will be a change of up to 10 per cent," he said. Goodwin has not set prices yet, although he does not usually do so until September.

Leisure & Outdoor Manufacturers Association (LOFA) chairman Paul Bevington, of Kettler, said: "The impact, if any, of Brexit will not be until 2018. If you've hedged some dollars it will probably see you through 2017. As a business, we buy forward, not 100 per cent but we aim to get 70 per cent of our expected supply bought forward so the impact will probably not be in 2017. I'm not saying every company is in the position to do that within LOFA but most will have done."

Bevington pointed out that garden centres can differentiate their offer from online retailers by making sure they stock less mainstream products and offering better service. Products that have sold best this year are those that can be used indoors and outdoors as well as anything novel, he added.

Bosmere's Glynn Davis said there seems to be a general feeling that an exchange rate of £1.40-£1.45 against the dollar could mean an increase in costs prices of around six per cent, which would have an impact but would not be "disastrous".

Whitehall Garden Centre owner Peter Self said he has seen a rise of nine per cent in sales of furniture and barbecues this year, partly thanks to exclusive lines bought through the Tillington Group. "People that can guarantee prices we are more likely to deal with," he said, adding that some suppliers have suggested rises of 10-15 per cent.

He added that some suppliers are setting prices based at a £1.40 exchange rate against the dollar and retailers will buy earlier to take advantage of prices set now with hedged dollars in case they go up by Glee.

Garden Centre Association (GCA) chairman Julian Winfield, of Haskins, said it has "not been a fantastic season on the back of two or three good springs in succession". He added that sales have "flattened" since a record spike in May, though June was still Haskins' second-best after last year. Buying director Conna Powles said: "We look on the rest of the year as a challenge."

Aylett Nurseries said June was two per cent down, as were year-to-date figures. Latest GCA figures show garden furniture and barbecue sales were down 23.5 per cent in April, but May was up 35.21 per cent.

Ian Charles, chief executive of online garden centre Primrose, said: "Wonderful May, but April and June were tough. We're blaming the weather for those. The last couple of weeks have been particularly slow. It could be weather/Brexit/Euro 2016 (football).

"Generally, we think we are unaffected by economic slowdowns due to the profile of our customers - not many of them lose their jobs, especially if they are retired - but very affected by weather, although in a whole year we generally think it evens out. I'd also say that for companies experiencing high growth it's hard to spot smaller shifts in buying patterns."

British Retail Consortium director Helen Dickinson said: "Retailers' top priority in the short term will be to ensure the continued ease and minimum additional costs of importing EU goods into the UK for sale to customers. A prolonged fall in the value of the pound will impact import costs and ultimately consumer prices, but this will take time to feed through.

"In its exit negotiations the Government should aim to ensure that the trade benefits of the single market - the absence of customs duties - are replicated in the UK's new relationship with the EU."

LOFA is also looking to offer a fire retardancy warranty in conjunction with Hertfordshire County Council Trading Standards.

Gardman - More trade forecast with new owner of Homebase

Gardman chief executive Pete Utting (pictured) has said the supplier’s Homebase business will "probably grow" thanks to new Homebase owner Bunnings’ commitment to brands. But Bunnings’ preference for a store-delivered rather than remote distribution centre model is a concern.

Utting said he would price Gardman’s latest catalogue ahead of Glee in September at the new
post-Brexit currency rate. Currency fluctuations could lead to garden goods prices rising by 15 per cent, he added, and there are concerns about employing staff from the EU.

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