More than quarter of retailers face threat of going bust due to supply chain issues, according to Brightpearl

The study from Brightpearl, which provides a retail operating system for some of the world’s biggest online stores, found that 85% of retail businesses have been hit by supply chain issues in the last year.

Almost half of shops and ecommerce brands (46%) have experienced “stockouts”, resulting in a loss of sales, the survey concluded.

A spokesman said: “The crisis is so severe that 26% of sellers are in danger of running out of cash within four weeks if things do not improve - threatening their survival.

“The survey found that shortage of goods was the biggest supply problem - experienced by 68% of respondents. Other issues included increased shipping costs (suffered by 64% of firms polled), lengthier delivery times for products (54%), suppliers selling out of stock (46%) and the increased prices of raw materials (40%)."

The results, which are based on a survey of 500 UK retailers, found that almost three in ten firms (28%) said supply issues or distribution failure was the biggest threat to their viability.

Brightpearl CEO Derek O’Carroll said: “We are in the worst supply chain crisis that any of us can remember and there is no sign of the problems easing before the end of the year.

“For retailers, the problems could be particularly severe as they prepare for autumn and peak trading in the months building up to Christmas.

“We are still in the relatively early stages of this crisis with the impact of the war in Ukraine and other global factors only just starting to really hit home.

“UK firms are going to need to plan for months of further turmoil and issues over stock, which can result in unhappy customers and major cash flow issues. There’s no doubt, online firms’ inability to predict demand and manage stock is the number one risk to their long-term health.

“It doesn’t need to be that way. The key message is get your demand planning right, and utilise tools and technologies that can help. It will underpin purchasing of goods, marketing and pricing strategies, staffing levels and ultimately support business growth. At the same, it’s important to be honest with customers who are well aware that we are in a global crisis and will be more tolerant of delays than they would be in less turbulent times.”