Retail will thrive in the face of Brexit uncertainty and challenging trading conditions because it is a “make it happen” sector, the new chairman of the British Retail Consortium (BRC), Richard Baker, has told Drapers.
Baker will start his term of office as chair on September 1, when John Lewis Partnership chairman Sir Charlie Mayfield stands down after two years.
Baker is chairman of DFS and Whitbread, owner of the Costa coffee chain, and holds various board and advisory roles with firms including Aimia, owner of the Nectar Card, and private equity firm Advent International.
He was previously chief executive of Alliance Boots from 2003 to 2007 and chief operating officer at Asda from 1994 to 2003.
Baker acknowledged that this is a particularly turbulent time for retail but said he is optimistic about its future because “retailers are used to fighting our corner” in the face of intense competition.
“Nothing is going to happen for two years and obviously the currency exchange is an issue, but it’s not the first time exchange rate has moved,” he said.
“The devaluation of the pound will have a big impact on fashion retailers, particularly as the vast majority of products are imported, which will cause cost pressures, but retailers will react in different ways. The pound has been falling in some ways since World War II, so it is not a new thing.
“Brexit will shine a light on some issues within communities and societies. It was a protest vote in my view and I agree with what Theresa May said: the country is becoming divided, so this was a wake-up call.”
Although Baker has no direct experience within fashion retail, he said he holds it in high regard: “I’ve always thought fashion is a very specialist business and not any old retailer can do it. I have the greatest respect for fashion retailers – it is a real mix of art and science. The art of styling a product is a real skill as is anticipating the taste of the population and brand positioning, but then the fast-changing nature of the stock and supply chain is more like engineering, which is my background.”
He believes Brexit could provide more opportunity for UK investment in infrastructure if inward investment falters, which in turn will provide fresh opportunities for retailers.
“The strong will prosper and the weak will disappear,” he said.
His immediate priorities within the BRC, the UK trade association for retail, will be to ensure the sector has a voice in government post-Brexit and maintain ongoing dialogue with policy-makers on issues such as apprenticeships and business rates. He believes both areas have made good progress but there is some way to go.
“One of the great things we do in retail, which I don’t think is always fully recognised, is to create a huge amount of general business managers, which is a huge value-add to British business,” he said.
“Every shop needs someone who can manage rates, costs, stock, security, health and safety, sales and profits. I can’t think of any other sector that produces such a volume of general managers, which creates a huge pipeline of people with great skills that can filter into other areas.
“Retail produces general managers with very broad, rounded business skills, often at a very young age, which is something we should shout about more,” he said.