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Gloucestershire Business News

EXCLUSIVE: Gloucester business hits out at 'bonkers' Brexit aftermath

Retail brands in the UK have been walloped by Brexit, according to new research from ecommerce analysts at Tradebyte and Retail Economics.

Since the UK and Northern Ireland exited the EU on January 31 2020, online-derived business has seen a 63% dent in trade across the border, with clothing enduring a dramatic 60% drop in business.

And according to bespoke bike sales specialists Quella, who are based in Gloucester's Goodridge Business Park and now seeing their fourteenth year of success, the pain of exporting into Europe makes trade across the English Channel no longer viable.

Chris Pengilley, managing director, told Punchline-Gloucester.com: "Because of higher duty thresholds for the USA, Australia and New Zealand, British business like ours is now looking at these markets. I can put a bike in a box today and someone can receive it in New York tomorrow, at a competitive price. We can't do the same for a customer in Calais. It's bonkers and like many, given the guidance of logistic partners, we have simply given up on EU trade."

As a consequence, Mr Pengilley said the company's focus on growth was now primarily on a home-market approach, having shut the door on a market that was once 30% of the company's trade.

Today's report from Tradebyte points to:

● Complicated customs and VAT procedures.

● A smaller employee market exacerbating talent shortages.

● Higher costs of trade impacting supply chains.

In total, international sales to the EU have nosedived by £5.9bn since Brexit, despite a buoyant e-commerce market south of Dover. Tradebyte's research is drawn from UK trade statistics for Q1 2024.

Richard Lim, CEO at 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."

Overall, the value of non-food exports since 2019 has diminished by 18%, with the clothing and footwear sectors being standout losers: in 109, exports in this sector were £7.4bn but by 2023 they had fallen to £2.7bn.

The Retail Tech Innovation Hub said the loss has put significant pressure on brands and retailers who lack the necessary expertise to navigate the new trading landscape.

The website said: "These challenges include escalated logistics costs, the complications of registering an EU entity for trading, and increased delays in an already fiercely competitive market characterised by tight profit margins and the need for rapid response to the latest trends."

Clothing and footwear were in the top three non-food UK exports before the UK exited, but those slots are now occupied by health and beauty, electricals, and DIY and gardening.

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