The impact of lingering supply chain disruptions, which will continue impacting retailers through 2022, will lead to fewer deals, lower sales and could cost the UK economy more than £5.6 billion, according to research from Coupa Software.
The company surveyed more than 600 supply chain leaders at retailers in the US, UK, France, and Germany and was conducted in October.
The research, which was carried out by Sapio Research on behalf of Coupa, found that retailers anticipate revenue losses between 5-20% from the past 18 months due to supply chain issues. More than half (58%) estimate losses over 5%, while a quarter (26%) expect losses greater than 10%, and 5% said they will be greater than 20%.
The US is hardest hit with retailers there reporting average losses of 5.7% – equating to $68bn from its GDP, followed by the UK with 5.3% – equating to £5.6bn from its GDP.
The implications of this will extend into retailers’ abilities to offer cut-price deals to convince customers to shop. According to the survey three in four (76%) UK retailers who usually offer Black Friday deals will not offer as many this year. Just under a third (29%) say they will offer between 25% – 50% fewer deals while 12% say they will offer between 50% – 75% fewer deals.
Retailers are also worried about the impact of supply chain disruptions on Christmas revenue with nearly three in four UK retailers (72%) saying they are concerned.
To try to combat the challenges 68% of retailers are encouraging people to shop early. This is being done through a number of tactics. Just over half (51%) are offering promotions earlier and 46% are displaying products earlier.
And retailers aren’t confident the challenges are over. Nine out of ten UK retailers (90%) believe that revenue will continue to be impacted by supply chain issues for at least the next six months.
“Retailers are striving to meet demand, maximise revenue potential, and find efficiencies as they continue to face unprecedented supply chain disruptions,” said Matthew Woodcock regional VP, supply chain at Coupa. “They are also encouraged to support key suppliers upon which they depend. To help overcome these omnipresent challenges, retailers are finding value in supply chain design and planning technology. They can stress test supply chains in real time, tear down silos, and eliminate blind spots across their businesses to outsmart disruptions.”
Retailers are said to be facing a perfect storm of disruption. As well as the impact of Brexit on their businesses the top issues in the UK have been HGV driver shortages, cited by 49% of all retailers, shortages and delays relating with shipping containers (43%), issues caused by ‘long’ supply chains (42%) and staffing shortages (24%).
