Retailers use outsourcing to improve focus on core business

Retailers are increasingly outsourcing their back-office functions so that they can concentrate on their core business activities.

More than 60% of retailers outsource part of their businesses so that they can focus on retailing, according to a survey of 24 members of trade body the British Retail Consortium.

Only 30% of retailers gave cost cutting as a reason for using an outsourcing company, while fewer than 30% said that they were getting a good return on investment from outsourcing.

Some 60% of retailers outsourced their IT, the same percentage outsourced their warehousing or another part of their distribution network, 45% outsourced payroll and 35% outsourced store security.

The 24 retailers surveyed had combined sales of £39.8bn out of total retail sales in the UK of £249bn. Between them, the retailers operated 8,300 stores out of the total UK stock of 278,630.

Some 88% of retailers said that outsourcing was successful despite the recent decision of J Sainsbury to cancel its outsourcing deal with Accenture.