Supermarkets losing £1 billion over data errors

7 October 2009

8 October 2009 | Allie Anderson

A mismatch of information between buyers and suppliers means UK retailers are missing out on significant potential savings.

According to the Data Crunch report by non-for-profit supply chain standards organisation GS1 UK, grocery retailers could save at least £1 billion over the next five years by ensuring the information they hold about products matches that held by their suppliers.

The report looked at the data processes of Tesco, Asda, Sainsbury's and Morrisons. This was compared with information held by four of the largest product vendors, Nestlé, Unilever, Procter & Gamble and Mars. In 80 per cent of cases where cross-referenced product data should have been identical, it was inaccurate. This is resulting in higher costs, as well as lost opportunities for savings.

Administrative work associated with reordering and invoicing is leading to increased spend, and sales are missed because of inaccurate information - including that relating to packaging, the environment and nutritional details. Mislaid or late deliveries, inaccurate orders, surplus transport costs and duplicated workload is costing the industry more than £140 million each year, the report said. Lost sales were estimated at £60 million annually. Over five years, this equates to £1 billion in lost opportunities. Gary Lynch, chief executive at GS1 UK, said: "The Data Crunch report highlights the significant benefits for both retailers and suppliers in adopting data standards across the industry. "We've been very encouraged by the collaborative action the industry has taken to date and are confident this joint work will continue apace as the issue is addressed across the UK grocery industry. By working together to improve their supply chain systems, both retailers and suppliers stand to benefit considerably from reduced costs and greater productivity."

 

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