Tree grower tells of Brexit's toll on sales

After a record start to the season, Brexit hit sales at Majestic Trees, but managing director Steve McCurdy says business is getting back to normal now.

McCurdy said: "Autumn 2015 (Oct-Dec 15) started off with outstanding sales and the quarter’s literally up 63 per cent, but come January a combination of the major upheaval during our office rebuilding work started in January with some operational staffing issues resulted in our January through March 16 quarter not being what it could have been. We still had a record six month period with excellent profits, but a closer analysis revealed that all was not as healthy as it could have been, with all the sales growth and the lion’s share of the profit coming in the autumn.

"We went into overdrive for the April through June quarter to try and capture these lost sales and were successful, but the daily deluge about the upcoming EU referendum started to take their toll. Furthermore, the daily dose of dire predictions by many EU; especially Junker and British politicians created a lot of uncertainty just prior to the EU referendum in June but especially in the months afterwards. In fact the scaremongering got so bad with the IMF joining in declaring that a vote to leave would be financial Armageddon for the UK. We were told house prices would implode by 18 – 30 per cent, pensions would be slashed, mass unemployment, etc; to the average person it sounded like a vote to leave would destroy our economy.

"The knock on effect is that especially after the UK voted to leave many people put off major spending; didn’t complete on their purchase of that new house due to the Treasury’s forecasted 18 per cent drop in house prices with the knock on effect that our tree sales dropped. This resulted in our year on year sales for July through September dropping by 27 per cent, and we closed out our financial year in September one per cent lower than 2015; not the 10 per cent plus growth we had planned on. Thankfully sales have really rebounded in October and November primarily as consumer confidence has rebounded, house prices primarily held firm, retail sales are up and the ‘experts’ including the IMF now say that the UK economy will still be the strongest growth economy in Europe over the next 12 months.

"So, I am fairly confident about 2017. The only problem we have to deal with is the exchange rate and the fact that at €1.16 to the pound it is not what is was in the spring. This is driven by currency traders; who predicted parity; who are sitting at their computers were 98 per cent of the trades they make are based on speculation and not currency exchanged to pay for imports, but we will have to deal with it until the pound rebounds.  With poorer sales over the past six months we will not need as many trees as last year, but we are still completing our biggest financial investment in the future which we believe will be a game changer."

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