UK High Street Gambling With Stock Shortages in Crucial Christmas Shopping Period

By Netsuite Inc., PRNE
Wednesday, December 15, 2010

Study Shows Retailers' Strategies to Pressure Wholesale / Distribution Partners to Bridge Potential Issues

LONDON, December 16, 2010 - Key findings:

    - Nearly one in three retailers would rather risk running out of stock
      this Christmas than have excess product on their hands

    - Retailers are approaching Christmas and the New Year in a positive
      frame of mind - 55% are optimistic and only 13% pessimistic about
      current conditions

    - 40% are applying additional pressure to wholesale / distribution
      partners, pushing for tighter margins and 30% are pushing for more
      rapid fulfilment

    - Survey also shows high street retailers are not capitalising on
      opportunities presented by the web, including e-commerce and social
      media engagement

Research sponsored by NetSuite Inc. (NYSE: N), the industry's leading
vendor of cloud-based financials/ERP software suites, has today revealed that
nearly a third of high street retailers are gambling with stock shortages
over the Christmas period, despite looking forward to a better sales
performance than in 2009. The full report, "The UK High Street: Squeezing the
Supply Chain" is available for download here:

The study, carried out among over 250 UK retailers by ORB (The Opinion
Research Business), found that nearly one in three (29%) retailers would
rather risk running out of supplies this Christmas than have excess stock on
their hands. The move, which leaves customers in danger of leaving stores
empty-handed, comes as retailers look to the future with renewed optimism.
The research reveals that over half (55%) retailers are positive about
current trading conditions. Looking specifically at Christmas, 40% expect
festive trading in 2010 to outperform that of 2009.

The potential stock shortages during retailers' traditionally busiest
time of the year continue a trend for retailers to hold less inventory during
the downturn. A third of survey respondents (34%) said that they had
deliberately kept stock levels low throughout 2010 in response to the
economic climate, and almost half (44%) reported they will be keeping stock
levels very tight even in the run up to Christmas.

Retailers are passing the pressure onto their wholesale / distribution
partners, with two in five retailers (40%) asking suppliers to maintain
discounts or cut prices, even if they have been ordering lower volumes, and
half of retailers (47%) are using more suppliers to enable price comparisons
and help drive down costs. 30% of respondents are asking their suppliers for
shorter order fulfilment times.

Roman Bukary, Head of Industries Marketing, NetSuite, comments: "It's
hugely encouraging to see UK retailers take an optimistic view of trading
conditions as we move towards 2011. However, keeping stock low and relying on
suppliers to bridge any gaps in supply will stress retailer-distributor
collaboration, require seamless communication and in case of any breakdown in
the trading network, might leave shoppers disappointed."

"The wholesale / distribution sector is used to pressure from their
retail partners, but need to gear up for today's unpredictable trading
conditions," continues Bukary. "Pressure to cut costs, accelerate fulfilment
and increased competition within the industry means that wholesale /
distributors need to ensure they have every tool at their disposal to
streamline their operations and change the way they work to cope with what's
likely to be a stressful and competitive Christmas crush - even before the
snow factors in."

This survey also found that the UK high street is yet to fully realise
the huge potential of the web to boost sales. While 80% of retailers
questioned have some form of online presence, as many as 53% of these don't
actually generate any turnover from their e-commerce operations.

A general lack of awareness of social media is also apparent, despite an
increasing amount of consumers using blogs and sites such as Twitter and
Facebook to make purchasing decisions and feedback on what they buy: just one
in five retailers (22%) seriously employ social media to tell people about
their business, while fewer than one in three UK retailers (28%) properly
monitor what customers are saying about them on social media sites.

"Over the last ten years, e-commerce has changed the face of retail and
gets more and more popular every year. The fact that so few high street
retailers are truly taking advantage of the Internet to engage with consumers
in a dialogue, gauge feedback, enhance sales and increase geographical reach
could be a worry," continues Bukary. "As people's shopping habits continue to
migrate to the web, the risk is that high street retailers could be left

A report discussing the research, and addressing the implications for
retailers, wholesalers and distributors as we move into 2011 is available at

For more information about NetSuite Inc., please visit

NOTE: NetSuite and the NetSuite logo are registered service marks of
NetSuite Inc.



The survey was conducted by telephone using a CATI method (Computer
Assisted Telephone Interview), with 253 interviews carried out between 19th
and 25th October 2010.


253 store managers / owners representing a cross section of the British
high street

All stores have at least 10 employees

Sector breakdown:

    - 26% Supermarkets / hypermarkets/ groceries
    - 16% Clothing and accessories
    - 10% General household stores
    - 5% Electrical goods
    - 4% Hardware / gardening / DIY
    - 4% Shoes / footwear / leather / travel goods
    - 4% Kitchen / household items
    - 4% Books / stationery
    - 4% Chemists / Pharmacists
    - 3% Cosmetics / perfumes
    - 1% Fabrics / materials
    - 19% Other (flooring / computers / jewellery / sports / toys / prams

About NetSuite

NetSuite Inc. is the industry's leading provider of cloud-based
financials/ERP software suites. NetSuite enables companies to manage core key
business operations in a single system, which includes ERP, accounting,
customer relationship management (CRM) and Ecommerce. NetSuite's "real-time
dashboard" technology provides an easy-to-use view into up-to-date,
role-specific business information.

About ORB

Established in 1994 ORB (The Opinion Research Business) is a leading
independent provider of communications and issues-based market research.
While enjoying more than a decade of continual growth ORB has worked with
over 150 clients in the private, public and voluntary sectors and in over 80
countries. Driven by a team of highly experienced market research
professionals with specialist knowledge across a wide range of sectors, the
company delivers both qualitative and quantitative research to the highest

ORB not only collects data on stakeholder opinion, experience and
behaviour, but also provides clients with guidance on how such information
can be used both strategically (in developing policy and communications) and
tactically (for advertising, generating media interest and building a winning
argument across the stakeholder community).


Patrick Yiu or Claire Rayner, both of Brands2Life, +44(0)207-592-1200, netsuite at

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