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EDITORIAL How UK retailers are feeling the supply chain pressures that have pushed Studio into administration; online sales fall by nearly a quarter in January

Image: Fotolia

Image: Fotolia

In today’s InternetRetailing newsletter we’re reporting as supply chain issues are named as UK retailers’ biggest concern in a study – and as Studio goes into administration after failing to get the working capital it wanted in order to overcome its own supply chain related problems.

Studio had been working to bridge the financial gap as it had goods that didn’t sell at Christmas because they were delivered late – due to Covid-19 related delays. It couldn’t arrange a £25m loan with the result that it’s now calling in the administrators and its Studio and Ace retail websites are no longer trading.

Studio seems to be far from the only retailer to face these pressures. A new study from Scurri suggests that supply chain issues are the biggest single operational issue for UK retailers in the wake of both Covid-19 and Brexit. Others include difficulty hiring, falling sales and challenges with importing goods.

On the other side of the Atlantic, sportswear brand Under Armour has reported record turnover and profits but also warns of supply chain challenges ahead. The multichannel sportswear brand, which sells both through wholesale and through its own direct-to-consumer shops and website, has seen fast growth in both channels over the last year.

Figures from the IMRG today provide useful context, reporting on the sharpest year-on-year decline in its 22 years of tracking UK ecommerce and multichannel sales. The comparison, however, is with last year’s strong lockdown online sales. There’s been a rise in average order values since December 2021, but it’s not yet clear whether that’s down to shoppers spending more because they want to buy more, or because retailers are having to raise prices to cover inflationary costs. Certainly, many retailers have said in recent weeks that they will need to raise prices – including both Studio, for whom the move was not enough.

JD Sports and Footasylum have been fined almost £5m between them for breaching an order not to share sensitive information during a CMA investigation. JD Sports is reviewing the detail of the judgement – and the fine – but says it does not believe the CMA’s account of events is a fair reflection.

In today’s guest comment, Andre Hordagoda of Go Instore suggests four ways retailers can adapt to the peaks and troughs of high street footfall.

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