Supply chain crisis hits home in September
Clogged up ports, absent lorry drivers and bare shelves didn’t hit the grocers’ sales in September, contrary to the media headlines. Instead it was home goods retailers, led by furniture and electricals stores, who bore the brunt of the problems, with their recent outperformance coming to a screeching halt. Sofa retailer DFS explained the situation in its current trading update, with business flooding in and an order bank way ahead of normal levels and continuing to grow, but sales limited by suppliers’ manufacturing capacity and its own logistics. The demand is still there, but retailers’ ability to satisfy it is limited.
With some of the same supply problems and many consumers still lacking key social, leisure and work occasions to encourage them to buy, fashion is proving the last major retail category to bounce back after recent phases of the Covid pandemic.
Overall, it was not a bad month from the consumer side, with all retail excluding petrol stations up 5.7% on the September 2019 and no lack of demand across most retail sectors. It was just the supply that was missing.