Poor stock planning costs UK retailers GBP £15 billion a year

New analysis indicates that poor stock planning is costing UK retailers approximately GBP £15 billion annually, with almost half of consumers stating that they would not return to a retailer following stock shortages.

Black Friday, now one of the country's most significant trading periods, is accompanied by substantial risks for retailers in terms of stock management and customer retention. Recent research has revealed that 46% of UK retailers experienced stockouts resulting in lost sales during peak trading events, while more than half (65%) of in-store shoppers have abandoned their purchases when faced with unavailable products. A critical 41% of consumers have said they would cease shopping with a brand entirely if stockouts became a regular occurrence.

Financial impact

Poor stock planning, as documented by market analysts, leads to missed sales opportunities or wasted capital tied up in excess inventory. The estimated GBP £15 billion annual loss affects retailers across multiple sectors, underlining the ongoing challenges faced during high-volume sales events such as Black Friday.

"Black Friday is a high-reward but high-risk moment for retailers," said David Smith, Principal Solution Architect at Kaleidoscope.com. "The harsh truth is that stockouts don't just hurt your sales on the day, they damage long-term customer loyalty. In a climate where every pound matters, retailers can't afford to let avoidable mistakes wipe out their margins."

According to Smith, many businesses still depend on prior year sales data to predict demand, which may not reflect rapidly changing consumer behaviour. This reliance, coupled with unpredictable market dynamics fuelled by social media trends, influencer marketing, and competitor discounting, increases the risk of both overstocking and stockouts.

Problems with traditional planning

Industry experts highlight that some retailers do not model multiple scenarios during their planning process, leaving themselves susceptible if demand sharply exceeds expectations. Misaligned stock planning leads to an overcommitment of working capital or, conversely, depleted stock that disappoints consumers and drives them to alternative retailers.

"Too many retailers still plan as if peak trading is predictable," Smith added. "But Black Friday moves at the speed of TikTok, not last year's spreadsheets. Scenario planning is the only way to prepare for the unexpected."

Consumer preferences are increasingly variable, and the sales environment is shaped by external factors that historical figures may not predict. Viral products can create demand surges overnight, while new marketing campaigns and competitor pricing shifts can destabilise even well-established forecasts.

Adopting new strategies

Smith and other analysts recommend the adoption of data-driven and flexible approaches to stock planning in order to minimise the risks associated with high-stakes trading events. Integrating real-time data - such as online traffic metrics, customer wishlists, and pre-order activity - can help forecast demand more accurately.

Building multiple demand scenarios before the event ensures that retailers have plans in place for a range of outcomes, from higher-than-expected sales to quieter trading periods. Preparation of this type can reduce the incidence of panic decisions and last-minute logistical complications.

Smith commented on the importance of balancing inventory with financial and operational considerations, including cash flow and distribution capabilities. Coordinating stock replenishment with these factors allows for greater agility and prevents overextension.

"Black Friday is brutal, but it's also a huge opportunity," said Smith. "The retailers who thrive are those that treat stock planning as a living process, not a one-off exercise. By blending data, scenario planning, and cash flow discipline, retailers can protect both their sales and their customer relationships."

The research has prompted the development of resources, such as a Peak Trading Checklist, aimed at supporting retailers in navigating the complexities of the trading season. These tools are designed to assist with scenario planning and swift response to unexpected changes in demand.

The findings and recommendations have particular urgency as retailers prepare for upcoming sales periods, with customer loyalty and profit margins at heightened risk due to avoidable supply chain and planning issues.