Why 21% of UK Retailers Abandoned Suppliers in 2021

New research from the UK shows that 21 percent of retailers have abandoned their suppliers due to a lack of sustainable practices. More than €8.3 billion ($13.1 billion) worth of contracts has been terminated, as the suppliers failed to meet ethical and sustainable standards.

This should come as no surprise, given how many younger consumers said they would abandon a retailer if they didn’t align with their values.

In 2020, we explained the influence that Gen Z has over the future of retail. A Voxburner report from 2020 research found that 23 percent of Gen Z shoppers have boycotted a brand entirely if the retailer doesn’t follow an action or a cause that they believe in or follow.

Now it seems that retailers are taking notice. Over 50 percent of decision-makers in retail said that sustainability is more important in 2022 than two years ago. Nearly half (49 percent) say the same about ethical standards.

“We are seeing a marked acceleration and shift among retailers towards prioritising sustainable and ethical standards in every part of their business operations,” shared Karen Johnson, the Head of Retail and Wholesale at Barclays Corporate Banking. “That is now starting to take its toll on retail suppliers with billions of pounds worth of contracts being cancelled every year.”

So, what drove the retailers to terminate these relationships with suppliers? According to the report, 39 percent of retailers said they abandoned these suppliers due to using unsustainable materials. Thirty-seven said they did the same due to unfair working hours. The absence of membership to an organisation or trade body that monitors ethical and sustainable standards was the reason why 32 percent of retailers terminated their contracts.

This goes to show how important consumer behaviour and the sentiment is for retailers moving forward, and the rise that suppliers can face if they don’t adjust to changing expectations.

“[These terminations are] being driven by increasing consumer demand and will rise even further as Gen Z enter the workplace and begin to earn their own money,” said Johnson. “Retailers must continue to monitor and improve their ethical and sustainability standards if they are to appeal strongly to younger demographics.”

The e-commerce landscape is changing. With a Power Retail Switched On membership, you get access to current e-commerce revenue and forecasting, traffic levels, average conversion rate, payment preferences and more!