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30% revenue cut: Retailers prepare for supply chain disruptions

30% revenue cut: Retailers prepare for supply chain disruptions
30% revenue cut: Retailers prepare for supply chain disruptions

New research from Coupa Software indicates that nearly 90% of UK retailers are concerned about supply chain issues this peak holiday season. 

More than 300 supply chain leaders at retailers in the US and UK were interviewed. More than 2,000 consumers also took part in the survey. UK retailers expect 30% revenue losses this holiday season. They are preparing for another “wave of supply chain disruptions and reduced consumer spending.”

Supply chain issues

These types of problems are familiar to the logistics industry. Issues include port congestion, delayed vessel sailing time, manufacturing, or warehouse breakdowns. Supply chain disruptions have also a significant impact on businesses. 

Conflict in the international world has an impact on the supply chain. The Ukraine-Russia war caused disruptions and concerns regarding vital grain exports. The conflict between Hamas and Israel is already having ripple effects on the supply chain. CNBC is reporting that businesses that operate in the region are already seeing notable changes in their financial outlooks. 

Survey findings

In this Coupa Software survey, 75% of UK retailers expect to lose between 5 and 30% of their revenue during holiday sales. This will mean billions of losses for the UK economy. 

Retailers expect the following this peak season:

  • Product shortages (78%)
  • Another wave of supply chain disruptions (82%)

Categories where the UK is set to have its most serious supply issues:

  • Food (51%)
  • Household goods (38%) 
  • Apparel (32%)
  • Toys (31%)

Cost of living puts the brakes on spending

Consumers and retailers are equally concerned about the cost of living. As UK economic turbulence continues, it’s a top concern for every household and business. 

According to the report, eight in ten retailers fear it will hurt the consumer’s ability to spend this holiday season. 

Top concerns include:

  • Decreased consumer spending (61%)
  • Meeting delivery deadlines (52%) 
  • Lack of sufficient labor (46%) 

Cost-of-living will dictate purchasing decisions for 76% of consumers:

  • 40% of UK shoppers expect to spend less money on holiday
  • 65% plan on reducing their budget between 10% and 50% 
  • 30% say their holiday budget won’t exceed  £80 (US $97) 

UK shoppers are not about to spoil their children with toys this year, with only 25% of customers expecting to spend money on this. Instead, they prioritize buying food (76%) and clothing (46%). 

Retailers to capitalize

“As supply chain issues and cost of living squeeze revenues this season, retailers will be in a race to maximize profit margin and meet demand while still keeping prices down for consumers,” says Matthew Woodcock, supply chain strategy at Coupa. 

“With product shortages likely to impact consumer access to essential goods, now is the time for retailers to capitalize on recent supply chain learnings, what-if scenarios, and rapid response processes they established over the past years, and act quickly to minimize potential disruptions during these critical last months of the year.”

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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