McColl's said supply disruption would cut profits by £7m © McColl's
McColl's said supply disruption would cut profits by £7m © McColl's

Which country is most concerned about supply disruption?

18 November 2021

Supply chain issues could cost companies billions of pounds, with nine in 10 retailers expecting disruptions to impact profits for the next six months, research has found. 

Over half (52%) of retailers across Europe and the US are worried about supply chain disruptions, and a further 55% are concerned about suppliers shutting down to global difficulties, according to business spend consultancy Coupa. 

The research, which surveyed 618 managers with responsibility for supply chain at retailers from the UK, US, France and Germany, found UK retailers were most concerned about disruptions (64%), followed by the US (61%), Germany (50%), and France (34%).

The research calculated that supply issues would cost the US economy a total of $68bn, and the UK £5.7bn. 

Container delays, shortages of HGV drivers and labour shortages are among the top factors hurting businesses. Driver shortages have led to congestion at ports across the globe, resulting in delays to products arriving on shelves. 

Matthew Woodcock, regional VP supply chain at Coupa, described the global disruptions as “unprecedented”. 

Andrew Opie, director of food and sustainability at the British Retail Consortium, told Supply Management the supply chain challenges will get worse as the country gears up for Christmas. 

He said: “The HGV driver shortage has already led to some gaps on shelves, and the situation may become more challenging in the run-up to Christmas. Retailers are doing everything they can to protect their customers, prioritising the food and other products necessary for everyone to make the most of the festive season.”

Opie warned customers to avoid panic buying ahead of the holiday season, and called on government to address the long-term issues underlying the shortages. 

“We urge consumers to be considerate of their fellow shoppers and to buy as they would do normally. The retail industry has been calling for action on labour shortages for some time and government needs to find a long-term solution to the shortages being seen throughout the supply chain, particularly on HGV drivers.”

The news comes as convenience store McColl’s warned its annual profits will be £7m lower than expected as shortages meant it struggled to secure enough snacks, wine and beer across its 1,200 UK stores.

The company said: “As has been well publicised, external factors, including the ongoing nationwide shortage of delivery drivers, labour shortages at distribution centres and insufficient supply of key products, including high margin branded impulse lines, continue to impact the supply chain nationwide and have intensified in the fourth quarter.”

McColl’s said it was consequently “unable to fully mitigate the impact to stores,” leading to “significantly lower” profits than expected.

Jonathan Miller, chief executive of McColl’s, said: “It is disappointing to see supply chain issues worsen through the second half, but external factors have not eased, and continue to impact much of the UK economy.

“We are working collaboratively with our wholesale partner Morrisons to restore in-store product availability as quickly as possible.”

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