Across the UK, businesses have spent the last six months adapting to the ‘new normal’, changing their ways of operating to keep their employees safe, whilst keeping their business healthy. With this alteration in the ways of working looking likely to remain for some time, moneycorp Bank conducted research with over 170 businesses that are trading internationally, to understand how they are preparing for the future, with Covid-19 still present, and Brexit on the horizon.
The Covid-19 outbreak has had a significant impact on British businesses. Whether positive or negative, the overwhelming majority of companies have found that there’s been a complete shift in their day-to-day running – be it with the end-consumer or their supply chain.
While 18% of UK businesses trading internationally saw an uptick in demand, others have experienced the pandemic very differently, the research shows:
- Over a half (52%) have suffered from reduced demand
- 30% have suffered delays and uncertainty over the arrival of goods
- 17% have reduced the volume of products ordered through specific suppliers
- 10% saw a reduced web traffic
- 6% found that they had to order through more costly suppliers
Consequently, there’s been a whole range of steps businesses have taken in order to shore up operations, and in fact, 43% have said that they’ve changed their business model altogether as a result of Covid-19.
We found that other steps businesses have taken have ranged from creating a comprehensive emergency operations centre, redesigning supply chains with local sources and second sources, to mapping suppliers to assess vulnerabilities and running outage scenarios to assess the possibility of unforeseen impacts.
Despite having made changes to adapt to the challenge of Covid-19, the research shows that businesses haven’t explored ways to safeguard their supply chains to mitigate the risks, and benefit from the opportunity that Brexit could bring. 88% of UK businesses trading internationally have admitted that they haven’t looked and aren’t going to look at switching their supply chains in preparation of Brexit.
With the Brexit deadline looming, and trade talks still ongoing, the results show that many British corporates aren’t thinking ahead to how Brexit may impact their supply chains. In order to utilise Brexit in the most beneficial way, particularly when it comes to international trade, they need to be prepared.
Lee McDarby, Managing Director of Corporate Foreign Exchange and International Payments at moneycorp commented:
“This year has been difficult for the majority of UK businesses, and the impact of Covid-19 can’t be downplayed. However, by focusing on the impact of the pandemic, many entities are taking their eye off Brexit, which could cause even greater disruption further down the line.
“With less than 30 days to go until the UK leaves the EU, it’s vital that businesses get ready for the transition that will take place. Fundamentally, the way we conduct business will change. Companies need to understand how this change will impact their operations, and what mechanisms need to be put in place to ensure they thrive post-Brexit. One thing that businesses can be sure of, as the 31st December approaches, is turbulent market winds. Now is the time to be assessing your currency exposure, to ensure international supply chains do not end up eating into British businesses’ bottom line.”
To keep up to date on how they could be impacted, moneycorp Bank is encouraging all UK businesses to visit the government website for live updates.