Energy and labour expenses for the fashion industry’s supply chains are on the rise due to growing worldwide inflation. According to the Office for National Statistics, the second quarter of 2022 had the highest quarterly number of company insolvencies in England and Wales since the third quarter of 2009. Energy prices were cited as the top issue by businesses between March and September 2022, up from 15% in February 2022. The energy crisis’s effects on the supply chain are evident in the price hikes that are being imposed on fashion retailers. Retailers must immediately reevaluate their supplier chains. In August and September, members of the Unite Union staged eight-day strikes in Felixstowe, Suffolk, and in September, they staged a two-week strike at the Peel Ports ports in Liverpool. As consumers cut back on their spending in response to the rising cost of living, some fashion businesses are cancelling orders. According to a high-end high street supplier, some stores are reducing the amount of their shipments to fit their budgets. Touker Suleyman, a retail operator, states: “We’re holding supply very tight.”
Related post: Fashion retailers cut inventory to deal with the upcoming economic challenges
According to GXO, which partners with Asos, Ted Baker, Matches Fashion, Marks & Spencer, and Matches, firms are becoming more effective at fulfilling orders. To cut their cost per mile of distribution charges, they are, wherever feasible, pooling transportation with other shops. Zeus, a technological platform that combines road freight management into a single end-to-end solution, and Primark have just begun working together. To prepare for the difficulties ahead, retailers will need to digitalize the whole supply chain even further. This includes minimising energy use in warehouses and retail locations, such as by lowering the temperature in stores by 1 to 2 degrees or switching to LED lighting, which may save 30% on expenses. Retailers are searching for ways to streamline the supply chain, whether it be through alternate delivery methods, sourcing from various countries, or changing the product design to incorporate new materials, packaging, or features. In order to acquire the best value, fashion merchants must consider supply chain efficiency.
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