With much lamentation over the effect of Brexit on British business, door and window hardware supplier Winlock Security Limited explain how they’ve handled the fallout from this year’s biggest industry shockwave.
“We didn’t expect a Leave vote,” Said MD Alan Parker “but sensibly we weren’t prepared to take a risk on currency”. In March 2016 Winlock announced that they would not fix their prices for 2016/17 until they knew the result of the referendum and also outlined their surcharge parameters in the event of a decision for Brexit. “We prepared our customers for the possibility of resultant price increases as best we could, but it didn’t make them any more palatable” continued Alan.
The impact of Brexit certainly had negative short-term implications for the Telford-based business as negotiating and managing the significant price hike on their imported ranges has been time consuming and at times fractious. However, Winlock report that their sales volumes have been strong since the June vote. Said Alan “We have not seen much evidence of customers shopping around in order to beat the price increases – I think all customers are aware that prices have to go up no matter who they buy from”.
In the longer term, as the UK’s only volume producer of window handles, the prospect of weaker sterling should however be positive. “In general our customers are more concerned about cost than provenance. We have some UK made product ranges where the price differential with Asian product is small at current exchange rates, and we are actively promoting these ranges to increase customer awareness. If we can supply a UK made product at close to Asian prices we believe many customers would take up this offer – not least because of the much shorter lead times involved and our ability to do short run ‘specials’ “explained Parker.
So does Winlock think Brexit will have a lasting impact? “From an industry perspective it’s likely to be 10 years before we understand the true impact of Brexit” said Alan. “The construction sector is largely dependent upon Eastern European labour to maintain activity levels and this is especially true of fabricators in many parts of the country. It is likely that the number of Eastern Europeans working in the UK is now at its peak and will probably fall in future. Whether this causes labour shortages will depend largely on our ability to train our home-grown staff. Either way the nature and nationality of the UK construction industry labour force will have changed significantly from what we see today”.
And what about sales? “Across the entire industry the short term impact has been relatively slight but negative.” Said Winlock’s MD Alan Parker “this is both in terms of increased costs for the sector as a whole and also a negative impact on consumer spending. Consumer confidence has held up well so far but an adverse effect may become more noticeable once Article 50 has been invoked”.
So the jury is still out as to whether Brexit will be bad for business but for the moment Winlock are remaining confident. “We have high hopes for 2017” commented Alan. “Our business is driven not by market growth, but rather by our product and service initiatives. The products and services we have launched in 2016 we hope will bring us a full year’s benefit.”