Comments this week from one of the Waitrose directors following Brexit Wednesday (as it may become known) almost seemed to be expecting a good performance from the partnership due to an economic downturn in 2017. He is right, Waitrose, performed their best in the last decade during the deepest parts of recession. By no coincidence, Cotswold Fayre tends to grow faster in times of low economic growth. Why is this? Well, we are both in the retail sector at the premium end, and it has been shown that in tough economic times consumers cut down on large ticket items but do treat themselves with good food and confectionery. Also in less good economic times, more cooking at home goes on and less eating out at restaurants.
So, in the speciality food retail industry, are we right to want an oncoming tough economic cycle? Well, I would say “no” for various reasons. 1) This one could be a big one and mapping expectations from previous downturns is dangerous. 2) Having a healthy food service sector and retail sector at the same time is good for the whole industry. 3) We should be able to prevent any downturn by exporting our way out of trouble over the next two years before any changes to customers and trade tariffs.
I am writing this from Tallinn, Estonia. It is difficult to believe that this nation was under Soviet control only just over quarter of a century ago. There is a vibrant economy here, to a large degree driven by digital technology. (I didn’t know until arriving here that Skype is an Estonian product.) There is a forward thinking, entrepreneurial vibe about the place, often common in young economies. Together with this a vibrant and innovative food scene. The pure number and quality of excellent restaurants here in a city of only 400,000 inhabitants puts many UK cities to shame. To a certain degree this is driven by tourism, but there aren’t many tourists here at present, with it still being cold, yet the restaurants we passed and the one we ate in last night were full. All were serving interesting food, at reasonably expensive prices. There simply wouldn’t be that many good places to eat in a UK city of 400,000.
I can’t help thinking being here in a forward-looking country, how much lack of forward drive there will be in the UK over the next two (or more likely five) years. Instead of promoting entrepreneurship and funding research in new ways, our government is going to be engaged in the minutiae of bureaucracy and stopping the component parts of the UK breaking apart (Scotland, Northern Ireland and now Gibraltar). Introspection doesn’t fuel entrepreneurship and is there a real danger that many of our bright young minds will look for opportunities in other European nations rather than the UK? I hope not, but I fear so.