Metro Supply Chain, a leading provider of contract logistics solutions to many of today’s most reputable global brands, today revealed new research that highlights a growing issue many retailers are facing – managing too much stock linked to changing buying patterns and a reduction in consumer spending amidst ongoing struggles with a higher cost-of-living.
The research, which surveyed 100 business leaders and key decision makers from across the UK’s retail sector, sought to understand the pain points for businesses in efficiently managing their supply chains and meeting changing consumer demands. It showed that almost two thirds (61%) of businesses are experiencing too much stock, citing a reduction in consumer spending as a direct contributor to the issue, which adds up to significant additional costs required to manage and store products. Respondents in the clothing (76%) and food and beverage (53%) sectors identified this issue as particularly problematic.
In recent years, demand for online goods has been higher than ever, but as the UK has recovered from the impacts of the recent pandemic, shoppers have already begun to tighten their budgets considering the ongoing rise in inflation and general cost-of-living. It has been reported that half of consumers are looking to cut back on non-essential purchases amidst the rising cost-of-living[1], with consumers pulling back on spending commitments during October 2023, according to recent research from the British Retail Consortium and Barclays bank[2].
Metro Supply Chain is at the heart of helping businesses tackle logistics challenges, providing end-to-end, data-driven supply chain solutions through technological innovation and robotics, to drive business growth for many of the most recognizable brands in the world. Through this research, the leading contract logistics company uncovered the most substantial pain points impacting businesses, including rising costs for staff, resources and materials (68%); excessive levels of stock (42%); reduced staff availability, satisfaction and happiness (41%); and ongoing challenges of meeting next-day delivery demand (40%) and managing returned and faulty products (39%).
Stuart Ager, managing director for Metro Supply Chain UK, commented: “This research highlights that whilst business in the past few years has been good for many predominantly online-first retailers, we are seeing the impact of reduced consumer spending, and the challenges retailers are having managing their distribution centres as they struggle to manage excessive stock.
“Metro Supply Chain is a strategic partner to many leading retail businesses, providing our clients with data-driven fulfilment and warehousing solutions to help them make more informed decisions at peak times and during unexpected changing demand like we’re seeing today. Equally important is ensuring the operations we manage for our clients are staffed with a highly engaged workforce equipped with the right training and skills required in today’s modern facilities.”
In recent years, online shopping has led the way for retailers and businesses, however, the research also showed that in-store shopping has begun to make a comeback this year, with even more focus being put on brick-and-mortar shopping facilities, according to almost half of businesses. This in turn has meant the demand for products in-store has increased for more shoppers, with 37% of participants claiming staff availability is one of the main demands for better management of stock and streamlining efficiencies with distribution to the shop floor. More than half also claimed that integrating more intelligent storage solutions (55%) and greater clarity of how technology and AI can support operations (48%) would benefit their businesses greatly – with advanced inventory management systems proving helpful with keeping track of inventory and stock and minimising the risk of overstocking or running out of in-demand goods.
As we head into the busy winter shopping period the research shows 69% of retailers are concerned about the challenges of managing returned stock. Returns are an integral part of modern ecommerce, and businesses need support to manage this aspect efficiently, by handling the return process, inspecting returned items, and managing restocking or disposal.
Mass returned goods create additional pressures on supply chains and warehouse facilities, leaving some retailers forced to send unsellable goods to landfill (70%). Respondents cited a need for greater technological support to avoid wasted goods and costly adds to operations. To help, Metro Supply Chain’s technology platform logs all faulty or damaged products and identifies solutions required on a case-by-case basis. To help reduce product sent to landfill, the company also offers a robust warranty claims and repair service staffed by a dedicated support team who works directly with retailers and customers to assess faulty products, conduct repairs, and initiate recalls when necessary. It also supports businesses resell returned and end-of-line products on global ecommerce platforms.
