Majority of UK online retailers concerned about labour shortage and supply chain issues affecting Christmas

A nationwide B2B survey among 350 retailers across the UK has revealed a deepening level of key concern felt by retailers leading up to this festive season. The study from software company, Scurri, also looked at how supply chain complications have caused changes in online retailers’ key growth markets and their feelings going into the 2022.

“Supply chain disruption is at a crisis point,” commented Rory O’Connor, Founder and CEO of Scurri. “HGV driver and CO2 shortages, inflated shipping costs and commodities prices, sustainability issues, financial strains and greater ESG regulations for sourcing and manufacturing goods are just some of the many challenges retailers are facing.”

With more than 9 out of 10 online retailers saying they are concerned or very concerned (93%) about labour shortage and supply chain issues ahead of the Christmas season, only as little as 7% of retailers say they are not really concerned.

The greatest cause of supply chain issues during this time are felt to be driver and staffing shortages (22%), the Northern Ireland Protocol and resulting complications (21%), China’s factory slowdown (20%), continuing Covid-19 complications (19%) and Brexit (17%).

As a result, many retailers are experiencing consequences in the form of half-empty shelves in their stores and major shortages. In addition, retailers are concerned about the golden quarter, saying pent-up shipping demand will continue to impact product availability.

“The only way to get out of firefight mode is to really accelerate digital transformation and improve supply chain visibility,” continued O’Connor. “Putting data at the heart of supply chain resilience allows a company to orchestrate disruption and constraints of the supply and demand.”

Online retailers have also hiked up their prices, with only 4% of retailers having no plans to change them. More than 95% of online retailers have or will increase their prices – 73% having already increased their prices and 22% not yet having increased their prices but with plans to do so shortly.

Additionally, retailers are planning to hire more temporary staff this year than previously to ensure the stocking of shelves and a smoother flow of operations. Only 2% of retailers said that they did not have plans to hire any additional staff, while almost three quarters of retailers have already begun this hiring process (74%).

When it comes to looking to the future, UK online retailers are confident about what is in store for 2022. Although concerns regarding the supply chain and resulting complications may still prevail, 84% say that they are optimistic about the new year. Things have changed however, and priorities for online retailers have shifted:

The survey further revealed that 46% of retailers said advancing their sustainability agenda to reduce impact on the planet is a priority. The majority of British consumers pay attention to the sustainability and environmental efforts of retail brands, with customers searching for more sustainable retail brands online.

Other top priorities include investing in digital retail technology (46%), cross border expansion (44%), Covid-19 recovery and return to pre-covid levels of business (42%), as well as winning new business (41%).

Although the majority of online retailers remain optimistic for the coming year, there are still worries – 86% of retailers state they are concerned over labour shortage and supply chain issues affecting beyond early 2022. Overall, it is fair to say that when looking past this busy retail season and into the near future, there is a sense of cautious optimism by retailers.

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