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New industry data has revealed that businesses in the sport, entertainment and recreation sector are holding 123% more stock compared to pre-pandemic levels.
Unleashed’s Manufacturers Health Check report used data from its inventory management software to track how SMEs in the UK have fared in 2022. The report shows businesses forced to stockpile huge quantities of goods as they navigate delays and shortages, against a background of rising inflation.
The analysis of more than 4,500 SMEs paints a picture of manufacturer health by examining four main data points: the value of stock on hand, Gross Margin Return on Inventory (GMROI), fulfilment days, and the price paid for goods purchased.
Sports and entertainment firms saw the third biggest increase in stock-on-hand levels of any sector when comparing Q3 stock levels in 2022 v the same period in 2019 – up 123.1% on pre-pandemic levels.
Noah Warren, COO at Temple Cycles, said: “One of the biggest problems we’ve had in our sector is lead times going exponentially crazy. So, we’ve had to move away from a just in time stock model to just in case. We are running a margin of 30 days extra stock.
“We’ve had to really try and be agile in order to get ahead of this stock issue and the only way we could be in stock is to invest more money in it. The only way to get out of it is to buy your way out of it. But you can’t do that indefinitely.”
The five industries with the biggest % increase in stock on hand value (Q3 2019 v Q3 2022)
The five industries with the biggest % decrease in GMROI (Q3 2019 v Q3 2022)
The industry-wide percentage change in fulfilment days (Q3 2019 v Q3 2022)
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Gareth Berry, CEO of Unleashed, said: “What started as a supply chain crisis appears to have evolved into an inventory crisis at the individual business level. Yes we’ve seen shipping times and prices ease, but that’s at the expense of firms who are forced to hold far more stock just to stay operational.
“It’s a tough situation for sports and entertainment firms that will present real cash flow pressures. Managing those stock levels down in the coming months will be a delicate task.”
