Brexit drives TGI Friday’s to change suppliers and cut portions

Alyson Scott, head of supply chain management at TGI Friday’s UK, has announced that the…...

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Alyson Scott, head of supply chain management at TGI Friday’s UK, has announced that the firm’s British restaurants have been preparing for the potential impact of Brexit. The organisation is migrating from overseas to UK-based suppliers and adjusting their menus to make savings on currency fluctuations.

The restaurant chain began embarking on these changes, she revealed, as soon as the Brexit vote was announced in June 2016. Changes aimed at cost reduction included reducing some portion sizes and switching to less costly ingredients in order to manage the additional £6m in costs the firm has had to absorb. Most of these have arisen as a result of currency fluctuations in the wake of the “Leave” vote in the 2016 EU referendum.

An indicator of just how crucial supply relationship management, sourcing savings and spend analytics are becoming for international firms like TGI Friday’s arose a week ago, when Brexit negotiations stalled amidst accusations from both sides of demands for unreasonable terms. More and more stakeholders are becoming anxious that Britain will be forced to exit the EU with no deal in place: time runs out for a negotiated settlement in five short months.

Food remains an especially acute source of anxiety for British businesses as formal Brexit draws ever closer, as new regulatory checks and border controls could cause delays that result in fresh produce starting to rot. Even before the food supply chain is formally hit by Brexit itself, however, UK businesses have been forced to absorb volatile exchange rates that have already caused havoc with their supply chains.

While currency variations existed prior to the Brexit vote, in its aftermath they have become considerably more volatile, leading Scott to diversify the currency risk of her sourcing portfolio by purchasing food and supplies in sterling, euros and US dollars.

Suppliers are also seeking to make Brexit-driven adjustments. Scott reported that a number of her suppliers based in Ireland are considering launching manufacturing facilities in the UK in order to continue servicing British customers.

Ed Cross

Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.

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