- As retailers cope with COVID-19-related supply chain woes, a new survey of 300 small and midsized businesses from the reviews and selection software firm Capterra found that 88% of such companies are switching or plan to switch some of their suppliers closer to the U.S. in 2023.
- Among the top three concerns small and midsize business owners have for 2023 are inflation (65%), lack of inventory (45%) and a possible recession (42%). More than two-thirds (67%) of small and mid-sized businesses said forecasting has helped prevent the accumulation of too much inventory.
- Sixty-four percent of small and midsize businesses said they’ve joined a group purchasing organization to reduce procurement costs and disruptions, per the press release.
Troubles in the supply chain have threatened to take a bite out of retailers' profits all year, according to various reports. Kearney released research estimating that supply chain issues could cost North American clothing and footwear companies between $9 billion and $17 billion in lost EBITDA this year. The company reached that conclusion after taking into account the impact of the omicron variant of Covid-19.
Small and midsize businesses’ shift to suppliers closer to the U.S. is part of a broader nearshoring transition, Capterra noted in its report. The coronavirus pandemic has made clear that suppliers, governments and vendors need to fix the global supply chain before it’s disrupted again in the future.
“The biggest surprise in the research is that nearshoring is happening much faster than predicted at small businesses,” Olivia Montgomery, associate principal supply chain analyst at Capterra said in a statement. “What’s less surprising, but equally critical, is the shift we’re seeing toward collaborative procurement. Supply chains are becoming less of a back-of-the-house ‘secret recipe’ and more like a joint collective where everyone benefits.”
Small and midsized businesses aren’t the only ones affected by rising prices. To cope with inflation, consumers have been buying their holiday purchases early, spending less, comparison shopping and turning to financing.