The UK wholesale sector is feeling the squeeze. Sales growth has slowed to just 1.1%, confidence is low and businesses are under mounting pressure from rising costs, tougher competition and shifting regulations. Many wholesalers are focused on survival, but those that adapt quickly can still find opportunities to move ahead.
Confidence is low, margins are tight
Business confidence in retail and wholesale took a hit in late 2024. The ICAEW UK Business Confidence Monitor shows rising costs, tax increases and sluggish sales are making businesses hesitant to invest. Many are focussed on survival over expansion and with margins already thin, risk-taking is off the table.
What does this mean?
Wholesalers need to focus on resilience. Cash flow, operational efficiency and cost control are more critical than ever. Investing in smarter stock management and automation could help businesses stay lean while maintaining service levels.
Sales are slowing, competition is fierce
Wholesale sales growth was just 1.1% in Q4 2024 - a worrying slowdown compared to previous years. Price pressure from both large competitors and emerging disruptors is making it harder to stand out. Customers are also becoming more price-sensitive, leading to longer decision cycles and tougher negotiations.
What does this mean?
Differentiation is key. Businesses that can offer better service, improved availability and value-added insights will have the upper hand. Data-driven pricing strategies and customer intelligence tools can help wholesalers navigate this tough market.
Rising costs are squeezing businesses
Wholesale firms are feeling the strain of increased wages (following the National Living Wage rise), higher supplier costs and new tax burdens. Passing these costs onto customers isn’t always an option, making efficiency more important than ever.
What does this mean?
The cost of inefficiency is rising. Businesses that invest in process automation, warehouse optimisation and smart forecasting will be better positioned to absorb external pressures.
Supply chain & labour challenges persist
While supply chain disruptions have eased, they haven’t disappeared. Labour shortages remain a problem, particularly in logistics roles, and wage increases are adding to the pressure.
What does this mean?
Firms need to make their supply chains more agile. Stronger supplier relationships, improved demand forecasting, and investment in workforce retention will help wholesalers weather ongoing challenges.
Sustainability & regulation are unavoidable
New compliance rules, such as packaging waste regulations, are creating extra costs and administrative burdens. At the same time, many businesses are making energy efficiency and waste reduction priorities.
What does this mean?
Sustainability is moving from a ‘nice to have’ to a business imperative. Companies that take a proactive approach - streamlining packaging, reducing waste, and improving energy efficiency—can mitigate costs and stay ahead of regulations.
A time for smart decisions
The challenges aren’t going away. But those that focus on efficiency, differentiation and digital transformation will be in the best position to thrive. The key is making smart investments today to build resilience for tomorrow.
What’s next for your business?
Efficiency isn’t optional. Orderwise helps wholesalers stay competitive with an all-in-one warehouse management system that streamlines operations and controls costs. From automated stock control and smarter forecasting to seamless order management, Orderwise gives businesses the tools to adapt and grow in a tough market.