UK retailers battling against rising costs of raw materials
The study by commercial insurer NIG, which surveyed businesses with annual turnovers ranging from £50,000 to £20 million, found that nearly one in five firms in the retail and distribution sectors admitted that they were considering changing business processes and products to accommodate the high cost of raw materials.
Around one in ten firms in the sectors said they were concerned that they were underinsured against theft or damage given rises in the costs of raw materials. Over one in ten reported they had suffered a theft of stock over the past 24 months while 3% – equivalent to 15,000 businesses – said they had been hit by a theft of raw materials.
Martin Hall, director of commercial underwriting at NIG, said: "The UK retail and distribution sector is facing a number of challenges and the rising cost of raw materials has clearly become a key concern for many retailers and similar businesses.
"While many are taking steps to cater for these challenges, it is vital that businesses assess the risks they face and make sure they are not leaving themselves exposed to unnecessary risks and threats. If companies have changed processes, products or moved property, for instance, they need to let their insurance broker knows as this could impact their cover."
The research found that 23% of firms in the sector had never had a professional risk assessment carried out on their business. Of those that had, 18% said that their last risk assessment was conducted more than 12 months ago.
Hall added: "The aim of a risk assessment is to determine what measures, if any, are required to safeguard the health, safety and welfare of employees and other third parties, who may be exposed to risks arising from businesses or business activities. It should be seen as a fundamental part of standard business practice."
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