In a letter to Secretary of State for International Trade Liam Fox, the BRC said the government’s strategy must focus on finding opportunities for lowering import costs as well as avoiding any increase in tariffs.
The industry body said that while UK retailers have been very successful in insulating consumers from the cost of rising business rates and labour, the recent fall in value of the pound in relation to other markets and years of deflation have left little margin to absorb added costs from import tariffs and administrative costs.
A failure to strike a good Brexit deal by 2019 would have a ‘disproportionately severe impact’ on retailers and their customers.
It said if the UK fell back onto World Trade Organisation (WTO) rules the new tariff rates that the UK would apply to imports from the EU would be highest for consumer staples like food and clothing.
Richard Baker, BRC chairman, commented on the importance of achieving trading arrangements with the rest of the world that do not put household budgets at risk.
“We will be supporting the government through this complex and difficult process, helping them analyse how increased cost pressures on retailers could mean higher shop prices and identifying any opportunities for new trade deals that could benefit individuals and families,” he said.
“The retail industry is the UK’s biggest importer, and has huge experience of importing from every corner of the world. We will be engaged in a constructive dialogue with government that will bring our experience to bear on the Brexit talks to the benefit of everyone in the UK.”