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And three in five (59 percent) of those in this situation admit there will be “dangerous” ramifications for their business if they fail to sell off excess stock.<\/p>\n
In addition to slashing the prices of products, small retailers are likely to resort to offering freebies with other purchases, bundling products together, and even giving away unwanted items.<\/p>\n
But while this is a major concern for UK enterprises, major price cuts will likely to be music to the ears of consumers in the wake of the ongoing cost-of-living crisis.<\/p>\n
Further research of 2,000 adults who celebrate Christmas – also commissioned by Inventory Planner – found 41 percent are “depending” on businesses to discount goods ahead of the festive period.<\/p>\n
A spokesman for the inventory forecasting and planning software for businesses said: “Having excess stock is a problem, because products start to decrease in value after a while.<\/p>\n
“Among other things, goods can start to deteriorate and perish, or go out of fashion, become redundant, and more.<\/p>\n
“Excess stock also means businesses have less room to fill their warehouses with new stock – goods which might be in demand.”<\/p>\n
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The study also found business owners with excess stock estimate their surplus to make up 19 percent of their overall stock holdings – with the value of this at almost £66,000.<\/p>\n
Understandably, 59 percent are concerned about the ramifications of this on their firm’s cash flow.<\/p>\n
As such, 45 percent fear they’ll be left with no choice but to liquidate much of their superfluous goods.<\/p>\n
Part of the reason for this worryingly common plight for small businesses is how difficult it is for owners to predict customer demand and sales, in what’s described as a fluctuating market.<\/p>\n
Of those with excess stock, almost three-quarters (70 percent) admitted it’s practically impossible for them to know how much stock they’ll need in the coming months.<\/p>\n
This uncertainty is likely to have been caused, in part, by unsuccessfully attempting to forecast demand during the pandemic.<\/p>\n
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And nearly two-thirds (62 percent) admitted that pandemic-inflated online demand was a major factor behind purchasing excess stock in the first place.<\/p>\n
However, 41 percent of all business owners polled intend to take steps to fix inventory planning issues ahead of the holiday season.<\/p>\n
Such measures include trying new product lines, internal processes such as more stock checks, and ordering less stock.<\/p>\n
The study, carried out via OnePoll, also found 17 percent are looking to invest in technology systems to help optimise stock replenishment and planning.<\/p>\n
The spokesman for Inventory Planner added: “Keeping track of stock, and knowing when to replenish goods and when not to, can prove to be very complex.<\/p>\n
“And this process is only made harder by what’s been happening in recent years – whether that’s the pandemic, or the cost-of-living crisis.”<\/p>\n