Coronavirus: Half of UK retailers grappling supply chain disruption

Data from Retail Economics and law firm Squire Patton Boggs showed 52% of retailers had experienced delays in their supply chains as a direct result of the virus, which has caused chaos at warehouses across China.

A quarter of retailers, including grocers, fashion operators, and health and beauty specialists, said the delays were “a significant issue” for their businesses, while 28% admitted they had suffered supply chain delays but insisted they “can manage the disruption”.

However, only 7% of retailers surveyed said they had flexible enough supply chains to allow them to switch suppliers away from China.

In the longer term, 24% of retailers said coronavirus could lead to “a permanent change in their business”, including switching suppliers and investing more in their online operations.

Should coronavirus persist, continuity of supply was earmarked as the biggest potential threat by 31% of retailers, while 38% said the biggest threat was damage to consumer confidence.

Some 45% of retailers surveyed said they had already seen that feed through to a fall in sales.

Retail Economics chief executive Richard Lim said: “Retailers are battling against significant disruption to supply chains as the coronavirus has choked off production in China. While the impacts may not yet be apparent on shop shelves, around a third of retailers suggested that ‘continuity of supply’ is currently their biggest concern.

“Of even greater concern for other retailers is the impact on consumer confidence and the effect this will have on their behaviour.

“The proportion of consumers currently avoiding international travel, using public transport and going to shopping destinations have all risen sharply over the last two weeks. Almost half of consumers say they will avoid international travel if the virus persists, while a third will avoid public transport and a quarter retail destinations.”