Around a quarter (24%) of major retailers in the UK say the coronavirus outbreak is causing disruption to their supply chains and having a significant impact on their business, a new survey has revealed.
Yet only 7% of retailers report having enough flexibility to be able to switch suppliers, according to a poll of 30 large retailers in the fashion, food and health and beauty sectors.
Conducted by the consultancy Retail Economics, the survey also found that one in ten British consumers have already started stockpiling food because of fears of an outbreak in the UK, the Guardian reported.
Close to half (45%) of the retail respondents say they have already seen a negative impact on sales, while three-quarters expect to see a decline in sales if the outbreak persists.
“Retailers are battling against significant disruption to supply chains as the coronavirus has choked off production in China,” said Richard Lim, chief executive at Retail Economics.
“While the impacts may not yet be apparent on shop shelves, about a third of retailers suggested that ‘continuity of supply’ was their biggest concern at present,” he added.
Lim also said retailers may be even more concerned about the impact of the virus on consumer confidence and the impact this will have on their shopping behaviour.
That’s because a separate survey of 2,000 consumers by Retail Economics, conducted with law firm Squire Patton Boggs, suggests that a quarter would avoid shopping centres and the high street if the virus spread, The Times reported.
In addition, 15% of UK consumers say they are already avoiding public transport, 23% are avoiding contact with other people and 9% are shunning restaurants and leisure destinations, such as cinemas.
Should the situation worsen – which the British government this week predicted it would – a third say they would consider avoiding public transport, with almost 30% saying they would stop going to restaurants and cinemas, and a quarter avoiding shopping destinations altogether.
“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,” Lim noted.
But while the outlook looks uncertain for physical stores, the survey also suggests that online retailers could benefit because half (49%) of consumers say they would consider buying more goods online if coronavirus persists.
However, half of them also say they would avoid buying online from international sellers that ship goods directly from China, the country that continues to be worst hit by the disease.
Sourced from Retail Economics, Guardian, The Times, BBC; additional content by WARC staff