Purchasing problems facing major UK retailers

It’s fair to say that the past few years have been miserable for many retailers with Tesco reporting the biggest loss ever recorded on the high street – a whopping £6.4bn. The recession has made it tough for small and large companies alike, but as the UK crawls its way out of a dark hole there are still many purchasing problems facing UK retailers, so let’s take a look at a few of them:

Ethical trading

Whether it’s castors or designer clothes, customers want to know that the products they are buying are ethically made and sourced. While many companies these days have strict ethical trading policies (particularly when buying from abroad), unscrupulous subcontractors can put a spanner in the work without major UK companies realising. Primark, for instance, is just one of the UK’s major retailers forced to sack its suppliers after an investigation for the BBC’s Panorama and The Observer uncovered children labouring in Indian refugee camps to produce some of its cheapest garments. Stunts like this can have a major impact on businesses, which is why it’s essential to know exactly where your products are coming from and how they’re being made.

Lack of budget

Ordering and purchasing stock is a major part of business, but what happens when you run out of cash due to slow paying clients or simply a lack of profit? Well, you can either take out a loan in a bid to buy more products and keep your business going or you can throw in the towel and go under. These seem to be the two main options open to businesses when things get tough and neither is particularly favoured – after all, is it better to get knee-deep in debt or to admit defeat? A lack of budget is a big problem for trade-based companies with many forced to shut due to poor funds. In fact, using figures from the Insolvency Service, the Conservatives have said that more companies have gone bust in the recent recession than in any other economic downturn with almost 27,000 forced to close since 2008.

Quality and quantity

With standards to maintain, many companies search for reliable suppliers that can provide high quantities of quality stock. This is much trickier than it sounds with many suppliers being able to offer the quality but not the quantity of products needed or visa-versa. In desperation, retailers may order from numerous different people, which requires a lot more energy, organisation and negotiation. Of course, retailers are looking to make a profit and have a set price at which they want to buy their products. If suppliers aren’t as cooperative as hoped they may end up losing profit as they go in search of a better deal – after all, they can’t afford not to buy anything at all as this could lose them customers in the long run.

There are many problems facing UK retailers these days but with careful planning and extensive knowledge of a particular business sector (including trade/retail prices, reputable suppliers and ethical trading standards) they can be largely avoided.


Posted by on May 20 2015. Filed under Blog. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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