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RETAIL ENVIRONMENT

Shop early call as retail sector sets out its festive stall

Christmas ‘is a coming’ and the retail industry is setting out its seasonal stall with a major emphasis on encouraging the public to shop early in light of the supply chain challenges faced by the sector. 

New research from parcelLab found that 47 per cent of online shoppers say they would order Christmas presents earlier this year to avoid delays. But the company warned that the UK’s existing supply chain crisis could be intensified by early demand.

The crisis, identified as a perfect storm of stock and staff shortages resulting from COVID-19, Brexit and challenges in the Far East with the soaring cost of shipping containers and disruption in the Suez Canal, is likely to impact the busiest season of the year.

The financial pressure created by supply chain shortages and the energy crisis is creating an atmosphere where higher retail consumer prices are inevitable as the financial results of Procter & Gamble (P&G), Danone, and Ericsson are highlighting significant increasing costs.

P&G, which owns a wide range of well-known beauty, grooming, and home care brands including Head & Shoulders and Ariel, expects to lose $2.3 billion in expenses this year, a factor it blames on increased raw material costs alongside higher energy prices.  

Danone said that there would be further inflationary pressures in the coming year and that operating margins would be safeguarded by price hikes and productivity increases. 

“Like just about everyone across the sector and beyond, we see inflationary pressures across the board,” said Juergen Esser, chief financial officer at Danone. “What started as increased inflation on material costs evolved into widespread constraints impacting our supply chain in many parts of the world. 

“That said, we are putting even greater focus on productivity and pricing actions to mitigate the impact on our performance, thus re-iterating our FY 2021 guidance.”

A report from EY-Parthenon revealed that UK listed companies in consumer-facing sectors, including retail and grocery producers, accounted for 33 per cent of all profit warnings in the third quarter of the year as rising energy prices, supply bottlenecks, and labour shortages spread across the economy.

Earlier in October, statistics released by Nielsen found that the four major supermarket brands have lost £2 billion this year due to ongoing supply chain issues.

As the under-siege sector sets out is stores for peak, Asda has launched its Christmas recruitment drive and confirmed the dates for its festive home delivery slots. 

The supermarket retailer aims to recruit 15,000 temporary employees. The new workers will fulfil a number of different roles, including serving customers, replenishing shelves, picking, packing, and delivering online orders. 

The move comes as the wider retail industry faces an ongoing labour and driver shortage that has seen warehouses increasing wages by up to 30 per cent to attract new staff.

Around 500 roles are based in Asda’s depots, 1,500 are home delivery driver positions, with the remainder being store-based roles across the UK. 

“We will do all we can to make sure customers have a fantastic Christmas and recruiting an extra 15,000 colleagues across our stores, depots and home delivery service will help us to provide them with great products and excellent service when they shop with us during the festive season,” said Asda chief people officer, Hayley Tatum.

According to the company, since the start of the pandemic, it has more than doubled the capacity of its online delivery service. It said that the week before Christmas the retailer will have 900,000 home delivery and Click and Collect slots. 

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