Maginus, a leading wholesale distribution and retail IT solution provider, has warned the UK retail market that they face becoming uncompetitive if they pass the cost of rising overheads onto consumers.
Latest figures from the Office for National Statistics (ONS) show that inflation has risen to 1.8% - the highest level since June 2014. It is widely anticipated that the price of goods at the till will continue to be forced up as the impact of falling exchange rates, higher import costs and the uncertainty around the impact of Brexit increase costs throughout the UK supply chain. And with wages predicted to remain largely stagnant consumers will ultimately feel the pinch.
"With inflationary pressures rising and consumer spending power falling, retailers and their suppliers need to address their inefficiencies as a matter of urgency "
Mark Thornton, Marketing Director
However, Maginus said that retailers can keep prices at current levels and boost their competitiveness by eliminating inefficiencies in their supply chain, rather than simply passing on the costs of rising overheads to the consumer. The company warned a price hike at the till to cover increased costs will ultimately have a negative impact on brand perception and lead to retailers becoming uncompetitive.
Maginus Marketing Director Mark Thornton commented: “Latest research shows that the UK retail supply chain is one of the most inefficient in the world, with low visibility of stock levels, an inability to forward plan and a lack of automated processes largely to blame. This can be attributed to a lack of investment in new systems that has left businesses struggling to keep their costs down and remain competitive with the dated, inflexible solutions they are using.
“With inflationary pressures rising and consumer spending power falling, retailers and their suppliers need to address their inefficiencies as a matter of urgency” continued Thornton. “Putting up prices at the till will not deliver a profit, nor is it likely to be tolerated by the consumer, so it is absolutely critical in these times of uncertainty that the retail sector improves efficiency by implementing the latest technology in order to keep prices down. This will need to include the hiring of technically savvy employees that understand how to best utilise the solutions that are now available to ensure both maximum efficiency and minimal price increases at the till.”
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