Brexit: Don’t panic, keep calm and carry on!
Following the surprise result of the BREXIT referendum, some of our friends in Europe have been asking us what we think the impact will be on the UK’s coffee shop industry.
As the UK enters a new era of economic uncertainty, the coffee shop industry is well-placed, as over the last seven years coffee shops have flourished and coffee has become ‘the little treat that people didn’t want to give up‘ even in the 2008 recession.
We’ve already seen the effects of this shock result on the depreciation of the pound in the global market. However, if we were to expect this trend to continue, a weaker pound means higher import costs, namely coffee and chocolate. We will then expect inflation; prices will have to rise, and it may become harder to borrow money again – especially since the UK may lose it’s triple A rating.
Add to this the potential trade tariffs designed to protect farmers, which could affect the prices of homegrown milk and wheat.
Immigration was a key factor that motivated many voters to vote leave. Therefore, we would expect border control reforms to be one of the first tasks that our new Prime Minister will undertake. Indicating a potential shrinkage of the workforce which will increase the cost and decrease the quality and flexibility of labour.
However, it may not all be bad news. A weaker pound may encourage an increase in the influx of tourists and deter natives from travelling abroad which would be a benefit to those coffee shops in tourist areas.
One thing we know for sure is that we don’t know anything for sure. The process of separation will not happen overnight and not without serious negotiations about the UK’s new position within Europe and the World. The separation will not be easy as no one has left the EU before and we will be setting a precedent which others may follow. After all, when was the last time you heard of an amicable divorce.
Here at Cafe Success, we are great believers in only worrying about the things you can affect. Focus on your guests, react to change quickly and look for opportunities that might present itself in this changing landscape.
Andrew & Claire Bowen, The Coffeepreneurs, are the Authors of the Amazon best seller, ‘The Daily Grind – how to open and run a coffee shop that makes money’. They are also the founders of Cafe Success, ‘The ultimate resource for coffee shops’. They own and run their own independent coffee shop, Java&Co, based in Oxfordshire, UK. With over 20 years of experience in the industry, they have been franchisee’s, regional franchisees single and multi site operators, as well as developing their own chain of independent coffee shops. They make coffee shop owners more money, by helping them ‘Start Up, Scale Up or Tune Up’ their coffee businesses.