Almost half of European supply chain managers expect the retail run up to Christmas to be more challenging than last year, research shows – with fewer than one-fifth believing it will be less difficult.
These are among the findings of a survey from Deposco, a provider of cloud-based supply chain solutions for retailers, distributors and third- and fourth-party logistics companies.
A total of 200 supply chain leaders – from European retailers, manufacturers, wholesalers and 3PL and 4PL firms – were quizzed.
Nearly half (41%) expect the second half of Q4 – traditionally a ‘golden’ period for retailers – to affect profitability, with just 18% feeling the period will outperform that of 2022.
Among the challenges listed by respondents, more than half (52%) say the management of costs top of their list of concerns.
Cost concerns are compounded by a backdrop of economic uncertainty, with 40% of respondents saying inflation is a global issue of real concern – more so, even, than political instability and seaport delays.
As a result of inflation fears, half (52%) of leaders expect to see ‘far-reaching’ consequences, with higher prices for supplies and services. Meanwhile, 40% anticipate lower consumer demand due to the cost-of-living crisis, while 26% predict longer lead times.
Price hikes a concern for supply chain chiefs
A third (35%) see ‘escalating pricing’ as another big worry as peak season nears. The research also shows that many (62%) supply chain chiefs increasingly see Amazon Prime Day as a key driver of peak season retail activity.
The drive towards sustainable logistics is another key challenge cited, with 33% saying improved sustainability is among their top priorities for peak season 2023.
Deposco Europe GM Will Lovatt says: “The focus on value is no surprise in an unpredictable economy, where costs for labour, materials, and services are higher.
“Amid these price hikes and inflation, it costs more to get work done, so supply chain executives have their eyes on expenses.”
He adds: “All these factors are driving market complexity and uncertainty. In general, operators understand and accept this but they are also eager to attack it more proactively.
“Experiences in recent years have created a thirst for solutions that simplify these uncertainties and provide resilience in coping with current realities.
“We are seeing a growing demand for technology to address these challenges from demand forecasting through to the latest warehouse management system and order management system solutions.”