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How UK retailers beat the Christmas Grinch

Most of the products in a popular Soap and Glory souvenir set are made in the UK. But the elaborate tins that contain the toiletries come from China, leaving Boots with a tricky logistical challenge.

The Nottingham-based retailer needed to bring a elapsed order of 80,000 tins into the UK and get them packed in time for the £32 product to launch on December 3.

It ended up shipping them to Korea and then airfreighting them to the UK. The visitor moreover hired spare “assemblers” to make up for the time lost considering of transport problems in order to put this and other popular sets together.

Such challenges have been typical of one of the most unusual festive periods in recent memory. Although stores have remained unshut — unlike in 2020 when non-essential retail was shut for most of November — retailers have grappled with Brexit bureaucracy, global shipping disruption and shortages of warehouse workers and truck drivers.

Boots’ managing director for UK and Ireland, Sebastian James, said ensuring seasonal ranges reached stores had been “an no-go effort” involving chartering its own ships — something Asda and John Lewis moreover did — and dispatching throne office staff to shops.

Another senior executive in the sector said there had “been a lot of compromises . . . everyone is struggling with next-day wordage and stock”.

But dire predictions of sold-out toys, imported turkeys and shortages of pigs in blankets have failed to materialise. “We have increased our volumes of turkeys this year versus last and they are all British,” said Asda, the UK’s third-largest supermarket. “And there are plenty of pigs in blankets.”

Grocers averted potential bottlenecks in distribution by hiring spare drivers in the storing and sending products with longer shelf lives, such as Christmas puddings and festive drinks, to stores older than usual. That cleared as much wordage topics as possible in the 10 days surpassing Christmas for fresh produce.

Non-food retailers have focused on maintaining availability of key product lines. “We have 15 per cent increasingly stock this year than last year,” said Alex Baldock, senior executive of electricals retailer Currys. “But we are showing customers 100 large-screen TV options instead of 120.”

Stock towers for the festive trading peak began older than usual at many retailers. “Hindsight is a wonderful thing, but looking at our stock availability, it’s materially largest than some competitors,” said Simon Arora, senior executive of variety discounter B&M.

The visitor asked suppliers in Asia to ship earlier, with the first Christmas stock arriving in August and September.

Members of the public walk passed a Poundland store in Nottingham, UK
The senior executive of Poundland’s owner said ‘we didn’t dilly-dally virtually over pricing if it meant we got goods in reasonable time’ © Oli Scarff/AFP/Getty

Andy Bond, senior executive of Poundland’s owner, Pepco, said it had sometimes been necessary to wastefulness profit margin with availability. “We have negotiated hard, as we unchangingly do, but we didn’t dilly-dally virtually over pricing if it meant we got goods in reasonable time.”

Scale helps enormously. Poundland has increasingly than 800 stores in the UK. Halfords dominates cycles. Argos is the country’s biggest toy retailer and Currys is the market leader in electricals.

“We are number one to our suppliers as well as our customers,” said Baldock.

Such luxuries do not wield to Christow, a small online retailer of home and garden products, which faced significant challenges importing strained Christmas trees.

“The region of Vietnam where many of these trees are made was put into a severe lockdown, which pushed when production dates,” said Josh Piercy, ecommerce director of the Devon-based company. “That would have been OK if everything else had gone perfectly.”

It did not, with shipping delays and suburbanite shortages in the UK compounding the disruption to manufacturing.

“It meant we had to be very flexible with our warehouse operations,” Piercy added. “If they could only unhook at two in the morning, or on a Saturday, then we ran an uneaten shift so we could take it.”

Christow moreover widow up to four weeks on to wordage times for pre-ordered goods, a form of expectation management widely employed elsewhere. Even John Lewis, which has a well-developed online offering, extended its standard wordage time to 10 days over the Black Friday period to build in some contingency.

Shoppers helped by ownership early. Total sales in the four weeks to November 27 were up 5 per cent versus the same period a year earlier, equal to the British Retail Consortium. Barclaycard said retail spending on payment cards rose 16 per cent in November, with toy, souvenir and jewellery sellers seeing particularly brisk trade.

But keeping shelves stocked has come at a price. Having once raised pay rates for HGV drivers, Amazon is now offering increasingly than £11 per hour for warehouse workers at many locations.

Sea freight rates are considerably higher year on year and stocking up older has meant increasingly mazuma tied up in inventory.

But there has been less discounting in many sectors. This time last year, big villenage such as Debenhams and Arcadia were set to be liquidated and were slashing prices to well-spoken stock. The BRC’s shop price tabulate for November showed prices rising by 0.3 per cent on average, the highest rate since May 2019.

The challenges will not end on December 25. For some sectors such as furniture, Boxing Day marks the start of one of the most important periods of the year.

Companies such as Made.com and DFS have warned of lengthening wordage times for large items such as sofas. They have responded by moving production nearer to Europe and holding increasingly stock.

For others, planning for Christmas 2022 will start towards the end of January. Piercy pointed out that raw materials prices have increased significantly since purchase agreements for the current year were struck and that these would feed through into prices next year.

Nor are the global issues virtually container freight likely to ease off. “We have unsupportable that disruption will protract for the whole of next year,” said Pepco’s Bond. “We cannot see these issues going yonder unendingly soon.”

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