Despite the economy beginning to show green shoots of recovery, UK retailers continue to face challenges around margin deterioration. Specifically, identifying the key drivers for this deterioration and developing strategies to overcome further erosion.
Our research has found that 66% of costs incurred by UK businesses are sustained in their supply chains.
However, as retailers look to maintain profit margins and keep investors satisfied, this statistic is often ignored and the more common cost-cutting initiatives are pursued (such as reducing head count, closing stores or cutting budgets).
Our research found that many retailers' senior management teams gave their non-core (GNFR) supply chains little attention in comparison to other priorities, resulting in a general lack of awareness as to the importance and true value that better managed GNFR expenditure can deliver.
There is a major opportunity that lies relatively unknown and under-exploited for many UK retailers who fail to successfully manage their GNFR costs - foregoing sustainable margin improvement AND greater control over their total cost base.