Mediocre buying teams are costing the UK retail sector £1.3bn in lost profits, according to the latest survey from Inverto.
150 directors of UK retailers questioned by the international management consultancy believed that profits could be increased across the retail industry through better buying, and that a 'perfect buying team' could improve margins by almost five per cent.
Richard McIntosh, UK managing director of Inverto, said: "Retailers need to stop and think. In the current economic climate, growing top line sales is hard.
"For the typical retailer, a one per cent saving in costs provides the equivalent EBIT impact of a 12 per cent increase in sales, so the way they buy deserves attention."
McIntosh believes that retailers need to assess the performance of their buying teams in able to access these benefits.
"Ninety per cent rate their buying team as better than average - they can't all be," he continued.
"Seventy per cent believe they're getting better terms than their competitors, this also cannot be true. Retailers are deluding themselves."
Almost a quarter of retailers polled indicated that increasing the range of suppliers would improve the performance of procurement.
"Increasing profits through procurement is a necessity over the next few years but it's getting harder with suppliers already squeezed and low-cost sourcing prevalent," McIntosh continued.
"Retailers have to become more sophisticated with their buying strategy and be open to new ways of working."