How to improve profit margins during peak shopping seasons with Pallet Hotel

11 June 2024

Peak Shopping Seasons Textured Image
Andrew Jackson-Proes - Chief Customer Officer

Andrew Jackson-Proes , Chief Customer Officer

Every retail business hopes to enjoy a busy quarter, where stock flies out the door, ready to be replaced by new goods for the coming season. Yet an alarming number of businesses are struggling.

Figures from Ernst & Young make for grim reading, showing that nearly half of FTSE retailers have issued profit warnings in the last year (seven in the first quarter of 2024). To make things worse, the Centre for Retail Research reported that 61 major retailers went bust last year. That’s a 17-year high.

In this article:

Why is retail struggling? Seasonality may hold the answer

It’s all too common for analysts to point the finger by saying that shops are discounting too heavily, reducing any chance of profitability. But retailers are in a difficult position. They can’t keep seasonal goods on the shelf all year round, and not everyone has room to store unsold items. Markdowns are a way of quickly shifting stock to free up room as part of the never-ending seasonal cycle that brings new items each quarter, but it’s eating into profits in a way that just isn’t sustainable. Again and again, sales are hit by variables that aren’t in anyone’s control, from the state of the economy to the turbulent British weather. There are already reports of how our rainy Spring has hurt trading.

And that’s not all that’s eating into retailer profits. Spikes in container prices are regular concerns, either triggered by seasonal factors like the Chinese New Year shutdown or by global events such as the ongoing Red Sea crisis. High costs and congestion force retailers to buy their seasonal goods well in advance to avoid supply disruption and to ensure that costs are affordable. Buyers might make their lives easier by ordering goods earlier still and then storing them once they reach the UK – if only they had room.

The good news is that there is a solution at hand. Pallet Hotel is helping businesses secure on-demand warehouse space across the whole of the UK, providing an affordable safety net for when storage is needed most.

Reducing the need for discounting

Discounting shouldn’t have to be inevitable. Barbecues and lawnmowers left unsold this Summer will still be worth selling at their full price next year, just as artificial Christmas trees will always be evergreen. More often than not, the problem comes down to storage space.

While businesses might consider buying conservatively to protect against the risk of having too much unsold stock to shift, this caps potential revenue. Another option might be to invest in more warehouse space. The problem with this route is that upfront costs can be huge. Although extra storage capacity does provide flexibility, many retailers find that they’re left with half-empty warehouses during quieter trading periods.

This is why Pallet Hotel is becoming such an attractive option. Being able to quickly secure overflow warehouse space gives businesses the ability to store evergreen seasonal stock to avoid unnecessary and costly markdowns as well as securing stock early to avoid lost sales opportunities.

Providing a safety network with price certainty

It’s normal for retailers to turn to their 3PL partners for emergency storage. However, this can be an expensive way of securing overflow warehouse space – especially during busy periods.

With Pallet Hotel, the cost is fixed per pallet, and there are no price increases during seasonal peaks. You also don’t need to negotiate warehouse by warehouse, region by region. With Pallet Hotel, you get instant access to an entire network of over 200 UK locations that can be used at any time.

It’s a marketplace of pre-negotiated warehouse sites that can be fired up on-demand, with businesses simply searching for where they need space. This new way of thinking is giving retailers more flexibility than ever before.

Helping the whole retail ecosystem

Retailers and suppliers can collaborate by using Pallet Hotel to host their vendor-managed inventory (VMI). Suppliers can store their products at a retailer’s chosen location within the Pallet Hotel network – as the network provides space across the UK, there will always be an ideal regional storage location that brings goods closer to their final destination. This reduces the need for unnecessary warehouse-to-warehouse travel, making for an efficient, sustainable supply chain that keeps costs down for all parties.

Ensuring just-in-case preparedness

There’s no commitment or cost when signing up to Pallet Hotel. You pay as you need, which means that it acts as an insurance policy to cover any last-minute storage requirements, moving the focus from just-in-time delivery to just-in-case preparedness. And the space isn’t just for emergency use only. You can use the storage for as long as you need.

The rewards are potentially huge. With one quick conversation, retailers can expand their overflow storage capability to cover the whole of the UK. Now is the time to start talking, as by incorporating Pallet Hotel into your seasonal planning, you’ll know that you can rely on overflow storage space no matter the situation.

Retailers can focus on profit margins without the need to quickly shift stock. While there may inevitably be some discounting of seasonal items, Pallet Hotel gives retailers more options for responding to market conditions. It offers more than just storage; it’s a safety network that the whole retail industry can rely on.

You can find pallet storage near you by viewing our Pallet Hotel map.

Learn how Pallet Hotel can transform your seasonal warehousing

If you’d like to have an informal chat about how Pallet Hotel can help your business, whether you need additional capacity, or have under-utilised warehouse assets, our experts would be happy to help.

Enquire now
Posted in Articles


Andrew Jackson-Proes - Chief Customer Officer

Andrew Jackson-Proes , Chief Customer Officer


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