More than a THIRD of US retailers are just eight weeks away from going bust due to supply chain issues
Supply chain issues have hit 80% of US merchants in the last year, according to a new Brightpearl survey.
Almost half of shops and ecommerce brands (52%) have experienced stockouts, resulting in a loss of sales.
The crisis is so severe that more than a third of retail businesses (31%) are in danger of running out of cash within eight weeks if things do not improve – threatening their survival.
The survey found that shortage of goods was the biggest supply problem – experienced by 67% of respondents.
Other issues included increased shipping costs (suffered by 59% of firms polled), stockouts (52%), and the increased prices of raw materials (47%).
Supply chain struggles are the number one threat to American brands in 2022, with 32% of merchants citing it as their biggest threat to their viability.
The hardest hit sector was DIY and Gardening, with 78% of respondents being impacted by supply chain issues.
The results are revealed in a new survey of 500 UK retailers by Brightpearl, which provides retail operating systems for some of the world’s biggest online stores.
Supply chain problems have added 23% to the average retail businesses’ costs in the last year, according to the survey.
More than half of firms (51%) have put up prices as a result, but only 30% of retailers are planning to invest in technology or new vendor partners to limit the damage caused by supply issues.
Shoppers’ brand loyalty is being eroded by the crisis. In the last 12 months, a third (35%)
Americans have discovered a product is sold out or unavailable when they came to order online, and 32% said they had bought from a new brand in the last year because an item was out-of-stock at their regular supplier.
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 the Holiday season..
“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.
“US 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. It doesn’t need to be that way though; the key message is get your demand planning right, and utilize 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.”
Austin-based Brightpearl works with thousands of retailers introducing software that puts orders, inventory, financials, POS (point of sale) and CRM (customer relationship management) in one place.
Its demand planning software helps retailers to eliminate costly stock sell-outs, effectively manage longer lead times, optimize container usage (to cut shipping costs), monitor supplier performance, save money and regain control.
Based in Bristol (UK) and Austin, Texas (US), Brightpearl by Sage provides a retail operating system (ROS) for retailers and wholesalers.
Our mission is clear: automate the back office so merchants can spend their time and money growing the business fearlessly, and without limitations. Brightpearl by Sage’s ROS includes financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfillment, warehouse and logistics. In addition, the operating system has high-performing connectors to the major ecommerce platforms, including Magento, BigCommerce and Shopify. Brightpearl’s platform manages over 10m transactions and $5bn of business a year.
In 2022, Brightpearl became part of the Sage Group plc, with the combination of Sage Intacct and Brightpearl creating a powerful solution for retailers and wholesalers.