More than a quarter of UK retailers are just four weeks away from going bust due to supply chain issues, according to a Brightpearl survey
The Bristol-based company found that 85% of retailer businesses have been hit by supply chain issues in the last year. While almost half of shops and ecommerce brands (46%) have experienced stockouts, resulting in a loss of sales.
According to the provider of demand planning software, the crisis is so severe that 26% of sellers are in danger of running out of cash within four weeks if things do not improve – threatening their survival.
The survey found that shortage of goods was the biggest supply problem – experienced by 68% of respondents. Other issues included increased shipping costs (suffered by 64% of firms polled), lengthier delivery times for products (54%), suppliers selling out of stock (46%) and the increased prices of raw materials (40%).
The hardest hit sector was luxury goods, with 92% of firms experiencing difficulties getting stock. The DIY & gardening sector was also impacted with 73% of firms experienced problems, with sports and leisure (60%), electronics (53%) and fashion and footwear (50%) all also reporting issues.
Furthermore, 28% of respondents said supply issues or distribution failure was the biggest threat to their viability – by far the highest response, beating poor cash flow (18%) and customer retention (16%).
Supply chain problems have added 21% to the average retailer’s costs in the last year, according to the survey.With 58% having to put up prices as a result and 29% taking a margin hit to keep prices stable while 28% are trying to source products domestically to limit the impact.
Brightpearl CEO Derek O’Carroll, said: “We are in the worst supply chain crisis that any of us can remember and there is no sign of the problems easing before the end of the year.
“For retailers, the problems could be particularly severe as they prepare for autumn and peak trading in the months building up to Christmas.
“We are still in the relatively early stages of this crisis with the impact of the war in Ukraine and other global factors only just starting to really hit home.”