Dive Brief:
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Since June 2016, TGI Friday's restaurants in the UK have been shifting to British suppliers and adjusting menus in order to save on currency fluctuations and prepare for Brexit, the company's head of supply chain management Alyson Scott told Supply Management.
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The restaurant reduced some portions and switched to some cheaper ingredients in order to contend with the extra £6 million ($7.9 million) in costs associated with currency volatility in the aftermath of the Brexit vote.
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As of Friday, Brexit negotiations are stalled as both sides have accused the other of requesting unreasonable terms, and stakeholders are getting nervous that the UK will be forced to leave the EU without a deal in six months when the clock runs out, reports The Wall Street Journal.
Dive Insight:
Food has been a particular source of anxiety for UK businesses in the run-up to Brexit since new border controls and regulatory checks could create delays. But even before Brexit hits the food system, volatile exchange rates have reeked havoc on supply chains for UK businesses.
Though currency fluctuations were a normal part of Scott's operation before the Brexit vote, the situation wouldn't have warranted major purchasing changes, but amid the ongoing ramifications of leaving the EU, Scott elected to diversify the currency risk of her sourcing portfolio, buying food and supplies in sterling, euros and dollars.
Suppliers are looking to make adjustments, too. Scott said that some of her Irish suppliers are looking into opening up manufacturing facilities in the UK in order to keep servicing their UK customers.
