#31 Mountain Warehouse CEO: Middle East Conflict Impacts UK Retail

Mark Neale, founder and chief executive of Mountain Warehouse - the outdoor clothing company - joins Will Bain for this episode of Big Boss Interview to discuss how conflict in the Middle East, tariff volatility and UK economic policy are affecting retailers and the wider economy.

Disruption to global shipping routes is already pushing up costs for businesses importing goods from Asia. Prior to the latest US/Isarael war against Iran ,attacks on commercial vessels in the Red Sea had effectively closed the Suez Canal to many freight ships for nearly a year, forcing cargo to travel around the Horn of Africa instead. That detour adds roughly two weeks to delivery times and significantly increases freight costs. Neale says companies have built greater resilience into supply chains since the pandemic, but sustained disruption in from the latest conflict will eventually feed through into higher prices if the situation continues.

Trade policy is creating further uncertainty due to the impact of American tariffs. Neale questions what such tariff policies are designed to achieve, arguing that no realistic trade regime is going to bring garment manufacturing back to the United States. He also says they've tried diversify away from Chinese made clothes as a result.

The interview also examines the state of the UK economy. Neale argues the country has lost “the best part of a year of growth” because the government repeatedly emphasised how broken parts of the country were — from the NHS to the economy — without setting out a clear positive vision for growth. When the new administration arrived, he says, inflation and interest rates were already beginning to fall and there were early signs of recovery emerging. Neale compares the situation to a new chief executive taking over a struggling company: you acknowledge the problems, but you also need to rally the workforce with a plan.

Hiring and labour regulation are another concern. Neale describes the government’s proposed Employment Rights Bill as “the let’s make it more difficult for people to get a job Bill”, warning that additional regulation may make businesses more cautious when recruiting. With around a million people in the UK currently out of work due to long-term sickness, he argues that policies which increase perceived hiring risk could make it harder for people trying to re-enter the workforce to get an opportunity.

Competition for jobs is already intense. When Mountain Warehouse opened a new store in Wigan, 493 people applied for just ten roles, including more than 100 applicants for the store manager position alone. Neale says that when employers face such large applicant pools alongside stricter employment rules, they are more likely to choose the safest candidate — potentially shutting out those who most need a chance.

Presenter: Will Bain Producer: Olie D'Albertanson Editor: Henry Jones

00:00 Sean and Will start the show 01:45 Mark Neale joins BBI 02:28 From rollerblades to Mountain Warehouse 08:17 Freight concerns & Middle East disruption 11:38 Diversifying supply chain away from China 17:44 Government stamping out green shoots of recovery & lost year of growth 25:39 Employment Rights Bill impact & unintended consequences for hiring 29:33 De minimis, ideal high street & long-term confidence