Whilst the media reports a twist regarding Brexit almost daily, we believe that it is important to consider and ensure that as an organisation, we are prepared for whatever the outcome.
If the possibility of a “hard Brexit” becomes a reality, our current stance and preparation for the following areas is as follows:
Our Supply Chain
Domestically, we currently stockhold goods in 5 warehouse facilities (4 in Blackwood, South Wales and an additional facility in Greater London).
We also operate from a warehouse hub in Mainaschaff, Germany for several existing clients with a significant number of stores in central & eastern Europe to fulfil their overseas deliveries in an efficient manner and to reduce carbon footprint (as opposed to delivering orders from one of our UK hubs).
This flexibility helped contribute to us achieving over 100 successful European new store kit deliveries for JD Sports in less than 3 months towards the end of 2016 – each new store kit including hundreds of product SKUs.
We would suggest continuing to operate in this manner, should the UK proceed with a “hard Brexit”.
For those of our accounts with most of their locations in mainland Europe, we would operate from our German hub primarily and for those of our accounts with most of their locations in the UK, we would operate from any of our 5 UK hubs primarily.
The luxury of having several different locations to dispatch GNFR & bespoke packaging supplies from also allows for us to continue operating at full capacity within 24 hours of a disaster occurring at any of our sites. We ensure that any given account has stock in at least two of our warehouse hubs to accommodate for efficient disaster recovery for all our clients.
We believe that a “hard Brexit” would result in a low risk to trading between a UK or European retailer & CCS McLays from a stockholding and delivery perspective.
Raw Material Disruption
Whilst we procure a considerable amount of packaging supplies overseas in Eastern Europe, China & the Far East, we recently invested in an automated paper twist bag machine based in Wales (Read more about our Partnership With The Design Group & £1M Investment). More retailers are rightly thinking of the potential harmful effects of single-use plastic bags and we believe offering paper twisted handle carrier bags produced in the UK can help eliminate the carbon footprint that arises from Far East production.
Possessing a manufacturing facility in South Wales would mean that even if a “hard Brexit” were to take place, it would make little difference to costings and processes after our production of paper twisted handle bags have been made in Wales. There would however be an effect on importing the raw materials from our FSC certified source in Scandinavia.
From a GNFR perspective, many of our products are sourced domestically and we don’t envisage there to be a major increase in the cost of these products. By contrast and not due to the subject of “Brexit”, the price of paper continues to rise and as such, influences the buying price of receipt till rolls.
CCS McLays currently employ a team of 125. Less than 5% of these team members would be at risk of deportation should the UK proceed with a “hard Brexit”.
Many of our employees who were born overseas have obtained British citizenship and have lived in the UK for many years.
There will be a “transitional period” active from March 2019 to December 2020, where there will be ZERO effect to businesses, with whatever deal is agreed, only coming into effect January 2021.
As the public are increasingly made aware that this is an ever-changing situation, it is difficult to prepare fully until there is some further clarity on the chosen direction for the nation.