how retailers cope with growth

How retailers cope with growth?

The UK Retail sector is slowly returning to growth and companies who are able to react quickly and seize the opportunity will reap the rewards.  Competition for customers has never been so fierce, as retailers battle high rents and a changing landscape.

How do you create competitive advantage?  How do you defend your position in the market?

Whatever strategy you deploy, your effectiveness will be determined by how much you can invest. 

How can you raise additional working capital and margin without increasing your borrowing costs?

A quick survey of our customers highlighted the following points as Board Room Agenda items:


Low- growth marketsSignificant growth has not yet returned to the market following the recession of the past five years. We are still in a "zero-sum" game where growth will come at the cost of a competitor
Input cost controlWith tight margins, small increases in costs can have  a huge impact on profitability. Buying departments must focus on maximising all negotiation tools at their disposal
Supply chain disruptionsGlobal supply chains have enabled the distribution of wealth, as developing countries can benefit from western growth.  This also creates significant risk and exposure to vulnerabilities to local conditions can be extremely difficult to appreciate. 
SourcingRetailers understand that in a globally diverse market, sourcing risks can have large impacts on costs, profitability and market position.

How can we help?

Woodsford Tradebridge provides working capital which delivers against these specific threats. We help UK Retailers maximise the opportunities created and defend their position in a highly competitive environment.  

Reduce input costs         

If you are able to lower your buying price by 3-5% you can add at least 2% points on to your Gross Profit, net of finance costs.  Our research suggests not all buyers are negotiating payment terms.  This could be due to a requirement to hold cash within the business or a general reluctance to ask the question.   “Would paying my invoice early help you?”

Suppliers can reduce their internal finance costs by receiving early settlement this saving is passed directly to the buyer.

Input cost controlMedia and Advertising companies in the UK demand a significant upfront payments. These payments are made far in advance of the benefits being delivered. We have seen disocunts of 10-15% for upfront payments.
Supply chain disruptionsUK retailers are often working on dual sourcing strategies, this can create multiple payment terms.  Our customers look to consolidate these payment runs and negotiate to fixed terms.
SourcingEuropean suppliers are often dealing with higher interest and inflation costs than in the UK. Making early payments provides stability for the supplier and this is a considerable advantage in the negotiation process. Discounts of 3 -5% are common.
Working capitalTraditionally large UK Retailers have worked hard to push supplier payment days out, with an early payment programme our customers are able to soften the move by offering the payment an option.  We are seeing 10-15 days added to supplier terms.



Mark Coxhead image
Mark Coxhead
Woodsford TradeBridge