Nearly half of retailers think they will see the end of widespread supply chain delays and disruption this year, with movement of goods returning to levels of normality seen before COVID and Brexit.
New research* by Advanced Supply Chain Group (ASCG) shows high confidence amongst 46% of retailers in supply chains normalising this year, whilst a third think 2022 will see some improvements in the timeliness and reliability of moving products.
The research shows strong levels of confidence exists amongst retailers, despite supply chain problems causing noticeable losses for many during the recent seasonal peak.
One-in-five retailers reported Christmas trading, including Black Friday sales, was between 21% – 30% down on forecasts, whilst a similar number saw pre-tax profits at 16% – 20% below expectations. This meant more than £5million in lost seasonal sales for a third of retailers, whilst 13% missed out on sales revenues worth over £1m.
Research data revealed 17% of retailers have low confidence in supply chains returning to pre-2020 levels of normality, with an additional 3% having no confidence and believing supply chains this year will experience similar disruption to that seen in 2021. These retailers cited the ongoing impact of COVID, Brexit-related changes and rising shipping costs as the three biggest risks preventing supply chains from stabilising.
Retailers are also increasingly concerned about the threat of environmental pressure groups causing supply chain disruption. After recent months during which Extinction Rebellion blocked warehouse depots and Insulate Britain protested on transport routes, more than half of retailers (56%) believe environmental extremism poses an increasing risk to the movement of goods in 2022.
Although the research shows strong confidence in supply chain performance this year, 33% of retailers are still planning to order stock earlier than usual in 2022, with the majority ordering between six to ten weeks ahead of typical schedules.
Other steps being taken by retailers to protect supply chains against uncertainty include improving efficiencies to boost margins and financial returns (30%), investing in supply chain software to enhance stock visibility and stock management (29%) and creating more supply chain contingency plans (26%).
Looking beyond delays and disruption, more than a third of retailers (35%) think the ‘Buy Now Pay Later’ trend will have the biggest impact on supply chains in 2022, while 32% think growing consumer demand for same-day deliveries will have a leading influence on the movement of products.
‘Eco-anxiety’ amongst consumers growing more concerned about climate change, was ranked by retailers as the third highest factor most likely to have the biggest impact on supply chains in 2022.
Caroline Ellis, commercial director at Advanced Supply Chain Group, commented: “Tackling big problems like Brexit and COVID head-on has seen retailers overhaul legacy supply chain systems and cheap, off-the-shelf management programmes. It’s fuelled strategic investment in bespoke supply chain software that is better equipping retailers to deal with uncertainty.
“Undoubtedly, there are still challenges on the horizon, but retailers are more optimistic about supply chain stability because they are finding new ways to win back control over inventory management in the face of adversity. Likewise, they are also drawing on supply chain data to pinpoint new solutions for reducing errors and optimising supply chains to mitigate the wider impact of problems.
“We can expect to see continued investment throughout 2022 in supply chains, which will help alleviate pressures caused by ‘buy now, pay later’ trends leading to higher volumes of goods moving in and out of warehouses.”
For more information about the supply chain trends, click here to download the free eBook, or visit: https://ebook.advancedsupplychain.com/
*About the research: SAPIO Research surveyed 212 retailers nationwide in January 2022. Senior professionals with responsibility for stock inventory management were asked for their opinions on trends affecting supply chain operations.
