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Supply chain issues and costs unlikely to return to pre-crisis norm

The global supply chain crisis is a long-term issue that won’t see costs return to pre-crisis levels, according to a new survey of the UK’s top 100 retailers.

The study, by UK law firm TLT, suggests that 87% of retailers do not believe things will go back to how they were before.

How they are reacting to such change varies in intensity. However, rising costs are retailers’ greatest concern when it comes to global supply chains (82%). Their biggest areas of increased spend include fuel (86%), shipping containers (68%), raw materials (66%), supplier costs (65%) and technology (51%).

The most popular responses for dealing with these increased costs include finding new efficiencies (68%), raising consumer product prices (67%) and charging more for deliveries (55%).

Their second greatest concern is product availability (64%). The same amount also believe that longer lead times with suppliers is a long-term issue.

Retailers have grown supplier bases (29%) as a result and are near-shoring or onshoring.

Their third biggest concern was around recruitment and retention at 64% with the labour shortage hitting warehousing and distribution (61%) hardest.

Perran Jervis, head of retail and consumer goods at TLT, says: “The global supply chain crisis isn’t going away, and the challenge is that this is affecting every link in the chain. As a result, retailers are having to quickly find new areas of flexibility and increase efficiencies, in order to stave off unfavourable decisions like raising prices and closing unprofitable stores. Retailers will need to consider all of their options, and we are increasingly seeing retailers re-thinking their supplier strategies and investing in technology solutions for example.”

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