Asda operates over 800 locations across its UK-wide store estate – from superstores to petrol stations – and serves 18 million customers every week. To deal with the sheer number of SKUs it stocks, Asda looked to limit the impact of inaccurate inventory and wanted to improve stock accuracy across its store network.

Inventory inaccuracy is a perennial challenge for grocery retailers, with data from ECR Retail Loss suggesting that 60% of all inventory records are incorrect. Discrepancies between stock records and what inventory is actually available can cause phantom or shadow inventory, a major driver of inefficiencies, lost sales and falling margins.

Whether it’s theft, poor process compliance or mis-scanned items, the causes for inventory inaccuracy are varied and complex. However, its impact is far-reaching with recent analysis suggests it causes up to 80% of out-of-stocks if left unchecked.

Asda partnered with Retail Insight to tackle phantom inventory, conducting a pilot in July 2023. This drew foundational store data from across Asda’s estate, which enabled fast implementation by leveraging the same data sets, and combined it with Retail Insight’s cognitive technology solution, InventoryInsight.

InventoryInsight is a machine learning-driven software that identifies and corrects inaccurate retailer inventory records to drive store performance. In nine months since deploying the technology Asda has removed over 1.6million units of phantom inventory from its store estate. Following the successful pilot, Asda will now conduct a full roll-out of InventoryInsight across its store network.

Neil Fairclough, senior director of retail transformation at Asda, said: “The ability to accurately identify phantom inventory across our estate is a huge advantage for our business, and goes a long way in enabling us to deliver a better in-store experience for our shoppers.

“Given the impressive results we received at trial, we were excited to conduct a full roll out of the InventoryInsight solution. We have not been disappointed by that decision with metrics that have exceeded our expectations.”

An exclusive company profile in the recently published RetailX UK Top500 2024 report looks at how Asda uses its website to highlight value and convenience, emphasising low prices while also flagging up a variety of flexible fulfilment options.

Asda is ranked Leading in this 10th edition of the report. Download it in full for a strategic overview of the UK retail sector; analysis of the UK Top500 and why these retailers are so good; as well as an interview with Sue Harries of Elite retailer Screwfix.

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There are reports that 11,000 jobs could go at John Lewis over the next five years. While, 688 THG employees will be placed at risk, with around 100 employees being made redundant intially.

THG cuts will be focused around its ecommerce services platform Ingenuity and at its Warrington warehouse after automation roll outs. John Lewis redundancies could come from its head office, supermarkets and department stores.

Both retail groups have explained that job cuts are part of wider efficiency plans, with the introduction of technology and cost saving measures also recommended.

A TGH spokesman said it was “committed to reviewing operational efficiency across the business, in line with its strategic pivot towards larger enterprise clients”.

Whereas a John Lewis source told The Guardian that executives had discussed cutting roles as part of its latest turnaround plan, this is amid rising pay and other costs as well as poor sales. There had been additional reports that John Lewis is reducing the terms of its redundancy package by half – offering one week of pay per year of service, instead of two, for anyone being made redundant from 01 February.

The retailer told staff it was making the change as the current package was “higher than typical market practice and comes at a very high cost”. It said it needed to “free up cash” with a “more affordable” policy.

An internal memo, issued on Thursday 25 January seen by The Telegraph, stated: “Against all of our competing priorities for investment, it’s fair to say that the high cost of redundancy pay has been one of the things that’s prevented us from moving as quickly as we’ve wanted to transform ourselves for the future, and has restricted our ability to invest more in pay.”

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The fast fashion ecommerce firm said it will work with the 100 employees, many who work on quality assurance and ethical compliance, impacted by the closure. It expects that “some roles will be relocated”.

A spokesperson for Boohoo Group, said: “We opened Thurmaston Lane in January 2022 to support [Boohoo] in several ways, including manufacturing, printing and training.

“As in any retail business the role of our sites continues to evolve over time and following significant investments at our Sheffield distribution centre and the opening of new distribution centre in the USA, we must now take steps to continue to ensure we are a more efficient, productive and strengthened business.

“All these factors have led us to make the difficult decision to consider relocating some of the operations at Thurmaston Lane and consider the closure of the site in due course.

“We are now in a period of consultation and are working closely with all affected colleagues to ensure they are fully supported during this process.”

The closure of the Thurmaston Lane factory comes only two months after a BBC Panorama investigation alleged Boohoo had broken promises to make its clothes fairly, and was pressuring suppliers to drive prices down.

As part of the documentary, an undercover journalist found the Leicester factory had been subcontracting orders to Morocco. Boohoo has stressed the closure was not related to the findings of the BBC investigation.

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WHSmith, which has over 1,100 stores across the UK in both travel and high street locations, is working to establish a more efficient and effective supply chain. In September 2023, WHSmith credited its travel business for a 28% rise in group revenues.

Sean Feeney, supply chain director, WHSmith, said: “WHSmith’s growth is accelerating and we need a supply chain which can match this and support our future plans.

“We are pleased to have appointed GXO as our UK logistics provider to work with us in creating a modern and efficient supply chain which delivers for our UK businesses and customers.”

All 440 colleagues who work in the three centres – located in Swindon, Birmingham and Dunstable – will transfer to GXO via the TUPE process.

Furthermore, WHSmith has also recently awarded its transport operations to GXO, starting from February 2024. GXO will be optimising the transport planning for WHSmith’s core distribution network as well as utilising its shared-user transport capabilities to provide full coverage for stores across the UK.

Gavin Williams, managing director, UK and Ireland, GXO, added: “We’re delighted to partner with WHSmith to deliver end-to-end supply chain management as part of its network modernisation. With our extensive retail warehousing and transportation expertise, as well as our technology-driven commitment to continuous improvement, we’re perfectly positioned to support WHSmith’s growth plans.”

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For the six months to 30 September 2023, the British bootmaker saw pre-tax profits fall 55% to £25.8m, while EBITDA decreased 13% and sales dropped 5% to £395.8m.

However, the newly published results did highlight demand for the footwear brand, in geographies where there have been no operational issues. Its Direct to Consumer (DTC) revenues were up 11%, with ecommerce increasing by 5%.

Furthermore, Dr Martens opened 25 new own stores globally, with retail revenue up by 17%.

“We saw a continued strong DTC performance in EMEA and APAC. In the USA, where there is an increasingly difficult consumer environment, our results have been more challenged, led by weakness in wholesale. We have strengthened the Americas leadership team and they are taking action, including refocusing marketing and improving our ecommerce trading capabilities,” said Kenny Wilson, chief executive officer, Dr Martens.

“It is likely, however, that given the challenging backdrop it will take longer to see an improvement in USA results than initially anticipated. Notwithstanding the clear challenges we face in the USA market we remain very confident in our iconic brand and the significant growth opportunity ahead of us.

“I would like to take this opportunity to thank the dedicated and passionate people of Dr. Martens for their exceptional hard work in H1 and their continued support as we enter the busiest period of the year.”

The statement stressed that there is still a large part of the financial year ahead of the retailer. But it did predict that its full year revenue will decline by high single-digit percentage year-on-year.

Russell Pointon, director of consumer at Edison Group, commented: “Current trading into the third quarter has been weaker than expected across the board, albeit with some signs of improvement in some regions in more recent weeks. The trading is weak enough to force management to reduce guidance again for FY24 and given macroeconomic uncertainty has withdrawn its prior guidance for high-single-digit revenue growth in FY25.”

Dr. Martens is ranked Top500 in RXUK Top500 research.

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The survey of over 1,000 UK shoppers revealed that consumers are increasingly experiencing availability issues, a problem symptomatic of phantom inventory – the discrepancy between stock listed on retailers’ systems and what items are actually available.

A fifth (19%) of consumers in the poll said they had experienced errors with retailers’ store systems, when ‘ghost’ stock was shown as available when it was, in fact, out-of-stock. Meanwhile, a third (32%) reported items being listed as in-stock online but which weren’t available when they arrived in store. A further quarter (25%) had experienced store associates not being able to find an item, even though they believed it was available in the store.

“As one of the main drivers of inefficiencies, sales, and margins, phantom inventory presents a significant and costly challenge to grocers,” said Paul Boyle, CEO of Retail Insight.

“Facing growing pressure on already razor-thin margins, phantom inventory risks becoming a profit-draining issue across every part of the retailer’s store operations, from wasted labour to out of stocks and increased shrink.”

With retailers’ average inventory records currently only 60% accurate, phantom inventory blocks replenishment and timely re-orders, causing shelf gaps that lead to lost sales and reduced customer loyalty.

Furthermore, 82% of UK shoppers polled said they had experienced out-of-stocks in-store during the last 12 months, up +11% points year-on-year, while 60% reported the same issue online, an increase of +6% since 2022. These poor levels of product availability aren’t just creating dissatisfied customers, they also risk costing retailers lost sales and loyalty.

“With recent analysis suggesting that phantom inventory can cause as much as 80% of out-of-stocks, it is clearly a major driver of lost sales that retailers can’t afford to ignore. By leveraging real-time data, retailers can address and correct inventory accuracy faster and more efficiently, ensuring better product availability, freeing up store associates to serve and, ultimately, delivering store execution that protects, and even boosts, margins,” Boyle concluded.

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According to reports in The Times, glitches with the new system, which was introduced last year, had “adverse effects on both our operations and customers’ ordering experience”. In turn there were additional costs to support order fulfilment and a one-off provision against stock that could not be sold.

Pre-tax profits were down by 76% to £9m in the 52 weeks to the end of March. The retailer has been able to recoup and achieve double-digit revenue growth in the fourth quarter, raising yearly revenue up by 1.4% to £221m.

A spokeswoman told The Times: “Despite challenging consumer retail conditions, End is performing well and continues to scale its operations to serve our global customer base. We remain focused on expanding our capabilities as we continue our transition into a modern, technology-led and scalable business.”

The menswear retailer also stressed that it was “confident that the inventory management processes and system issues” were “now in good order”.

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The privately owned Very Group reported flagship Very brand revenues of £1.8bn in its latest financial year, the 52 weeks to July 2 2022, down 4% on the previous year. Its retail sales came in at £1.4bn (-7.7%), compared with record pandemic sales. The wider Very Group reported group revenues of £2.1bn (-7.3%) over the same period, and pre-tax profits of £63.9bn (+2.2%).

At the time, Very Group chief financial officer Ben Fletcher said its “robust performance” was “driven by ongoing structural growth in the Very brand, our integrated business model – and, of course, our amazing people” which “continues to prove resilient as we adapt to changing customer behaviour”.

The roots of the Very Group go back to mail order catalogues in the 1860s. The Very brand launched in 2009 to serve online shoppers. The Very website is easy to navigate, whether through search or primary categories from designer brands and toys to electricals. Filters to narrow the choice include product, activity, colour, fit, price range, delivery speed and customer ratings.

Products are illustrated through zoomable images, while information includes delivery times, reviews and star ratings, plus a fit checker for clothing. Shoppers can save items for later, or share them via email, Google Plus, or social media channels. Recommendations include other items from the same brand, as well as ‘people who bought this’. From the landing page, shoppers can download mobile or Android apps, or click through to Facebook, Instagram, Pinterest, Twitter and YouTube.

The retailer, whose fully automated Skygate warehouse opened in March 2020, offers one-day delivery as standard for orders placed by 10pm, Sunday to Friday, at a cost of £3.99. Premium delivery services include nominated day, direct from supplier and larger item services. Click and collect – from one of “thousands” of stores, including Post Offices and Yodel network collection points – costs £3, or is free for orders of £30 or more. Returns can be made for up to 28 days, through a Yodel or Post Office collection point, free of charge using a pre-paid label.

This case study originally appeared the RetailX UK Top500 2023 report. Download the report in full to discover:

• Strategic overview of the UK ecommerce market
• Exclusive Interview with Sherilyn Paterson of JD Group
• Case study: Dunelm, Toolstation, Yours Clothing, Cass Art, MenKind, The Works, Swarovski

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In the course of the coming months, Poundland intends to increase the number of roles at Darton from 77 to almost 200 by December as the centre becomes a hub for its growing digital business.

Poundland’s online business is growing rapidly after the 2022 acquisition of Poundshop.com and its picking and fulfilment operations centre in Wednesbury, West Midlands.

The success of Poundshop.com which has seen orders more than double under Poundland ownership, means its operations are running close to full capacity. Adding Darton as the discount retailer’s second digital centre will enable Poundland to continue to expand its digital business at pace.

After establishing the second digital distribution centre at Darton, it intends to combine its Poundshop.com and Poundland.co.uk websites later this summer, allowing customers to shop an expanded Poundland range online for delivery to their homes.

The expansion at Darton adds to Poundland’s commitment when it acquired Fultons, to nurture and grow employment at the site. The partnership with the Fultons team has enabled Poundland to roll out frozen and chilled foods to more than half its 800-plus stores nationwide, proudly becoming its National Frozen Distribution Centre.

“We’re extremely proud to bring good jobs news to Barnsley and South Yorkshire,” said Poundland director of digital Tom Hill.

“Since bringing Fultons into our family as we’ve built our food offer, we’ve made Darton a true centre of excellence in the buying and distribution of chilled and frozen ranges for a rapidly growing number of stores.

“We now look forward to building a team at Darton that can help us also expand our digital business as we offer our customers more ways to shop at Poundland.”

Poundland’s digital expansion is one element of the transformation programme being rolled out across the business. Alongside chilled and frozen food, this includes bringing Pep clothing and homewares to the majority of its stores. It is also currently bringing fresh fruit and vegetables, and beers wines and spirits to an increasing number of locations as it offers more of what customers buy week-in, week-out.

Poundland is on track to add over half a million square feet of new space this financial year as it opens and relocates stores. It has already opened and relocated 33 stores in FY23 and expects to have opened around 50 by the end of September.

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By moving services to GXO’s newly refurbished 170,000-square-foot facility outside London, Abercrombie & Fitch, which features in the RetailX UK Top500, will be able to expand its ecommerce offering, increase service flexibility and reduce inventory concentration from a sole location.

“Staying close to our customers is top priority at A&F Co. By expanding our partnership GXO will support our efforts to improve ecommerce experiences for customers globally. We are confident that the additional fulfilment capacity will improve speed and the overall omni-channel shopping experience for our UK customers,” explained Larry Grischow, EVP supply chain of A&F Co.

GXO currently employs over 60 team members at the site who provide picking, packing and sortation services using modular technology, with plans to more than quadruple that number in line with Abercrombie & Fitch’s growth plans.

In addition, GXO will leverage its reverse logistics solutions to process returns within 48 hours of receipt, maximising value through recovery by making products available for resale, while reducing waste and delivering significant cost savings. GXO will also progressively implement goods-to-person automation and adaptive technology into the operations to improve efficiency and quality.

The expansion follows the success of GXO’s partnership with A&F Co in the US, where the company operates a high-tech distribution centre featuring advanced automation and goods-to-person robotics, intelligent analytics and AI.

Gavin Williams, GXO’s managing director, UK and Ireland, commented: “After sucessfully launching a major warehouse operation in the US last year, we’re excited to bring Abercrombie & Fitch to the UK with a dedicated warehouse, underpinned by our WMS, to seamlessly manage their fulfilment and returns.

“Our facility puts stock closer to Abercrombie & Fitch’s UK consumers, improving delivery and returns processing speeds and reducing environmental impact. This is a long-term, global partnership, and we’re looking forward to supporting their growth plans in the UK.”

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