Retailers are bracing themselves for a raft of problems in the run up to Christmas as supply chain issues and staff shortages intensify.
Supply chain disruption is at a crisis point,” said Rory O’Connor, founder and CEO of Scurri, an Irish software provider that organises eCommerce ordering, shipping, and delivery processes for businesses.
Its research among online retailers indicates almost nine in 10 (89pc) now have concerns about labour shortages and supply chain issues ahead of the busiest period in the year.
It comes as South Africa’s Spar Group highlighted issues in Ireland in a recent analyst call for its full-year 2021 results. It operates hundreds of shops here.
During the call, group CEO Brett Walker Botten said “cost-control projects” had been introduced in Ireland to mitigate distribution centre and logistics staffing challenges.
Botten said Spar Group had “come up against considerable trade and cost headwinds due to the shortage of truck drivers and other workforce in this supply chain in the UK and Ireland”.
The sentiment around staff shortages was echoed by Mark Wayne Godfrey, the Spar Group financial director, who spoke of “particularly the challenges that the Irish business, and not just Ireland, but also the UK subsidiary and probably at some point in time the greater Europe [subsidiary] is going to experience around labour shortages in the wholesale and the logistics space.
“There is a real shortage of drivers in Ireland and the United Kingdom. And as a result of that, there’s a lot of wage pressure on being able to ensure that we have the necessary resources.”
Godfrey highlighted the Irish business, which BWG Foods runs, had been experiencing an increase in the cost of petrol and diesel. Average fuel prices are currently at record highs. Despite the issues, Spar Group said the Irish business, which also trades in the south-west of England, had a strong year and reported a profit before tax of 793.2m South African rand (€44.4m) in the results.
BWG owns and operates several retail brands with over 1,000 Spar, Eurospar, Londis and XL stores.
Scurri carried out its annual research among 150 retailers. O’Connor said HGV drivers, inflated shipping costs and commodities prices and sustainability challenges were among the issues being faced.
More than half of the surveyed online retailers (59pc) felt they would be facing a more challenging Christmas season than in 2020. For physical stores there were similar sentiments, with 58pc stating they see the circumstances being more challenging.
The majority of online retailers are optimistic about next year, although 86pc said they were concerned labour shortages and supply chain issues would persist beyond early 2022.
