The real retail advantage of improved GNFR management

The retail industry has reached a reckoning where goods-not-for-resale (GNFR) maturity is now a commercial differentiator. There’s a clear performance gap between retailers with structured procurement practices and those relying on fragmented, reactive processes. In this article, Ian Hall explains why good GNFR management goes beyond saving costs and brand consistency to boost the entire customer experience.

At a time of sustained pressure on the UK fashion retail sector, sales are forecast to grow by just 2.3% in 2026 (Retail Economics and CCS McLays 2026 Report – From blind spot to retail advantage). Retail leaders are scrambling to offset rising costs through price increases or volume growth and research by CCS McLays and Retail Economics shows a third of apparel retailers are prioritising profitability in 2026. This means that savvy retail leaders must take a strategic approach to in-store consumables to make serious savings.

Better known as goods-not-for-resale (GNFR), this includes the products and services retailers rely on to keep operations running but do not sell to customers, everything from packaging, store consumables, to point-of-sale (POS) materials, office and IT supplies. While GNFR underpins daily operations across stores, warehouses, and ecommerce, it often receives limited senior attention despite its scale and growing complexity.

The research also confirms this is a major blind spot for retail C-suite, with 90% of mid-sized businesses (£250-500m turnover) considering GNFR a blind spot. In fact, this long-overlooked blind spot driven by widespread mismanagement of GNFR translates into £276m in fashion retail sector-wide savings flowing directly to operating profit. GNFR mismanagement is eroding profits - equivalent to the profit from £5.9bn in sales.

Barriers to good GNFR management

Although there are various barriers to GNFR success, the research shows that the greatest barrier to improving GNFR cost control is leadership buy-in, cited by 24% of retailers, followed by resource constraints (22%) and supplier market structure (21%). Trading updates tend to focus on merchandise costs, yet a significant share of margin pressure sits within non-merchandise spend.

Some structural trends are driving adoption such as embedded packaging inflation following years of supply disruption; rising wage costs being absorbed into GNFR contracts; and persistently high returns rates increasing demand for consumables, transit packaging, and processing materials.

There are also GNFR differences by predominant sales channel and size of business. For instance, online-led retailers face GNFR ratios two to three percentage points higher than store-based peers, reflecting the variable cost structure of ecommerce, where packaging, fulfilment, and returns scale directly with order volumes.

Smaller retailers tend to be reactive and under-resourced, and only the largest players demonstrate strong strategic control - where even small efficiency gains translate into multi-million-pound profit improvements.

The challenge is particularly acute in the mid-market, where retailers are being squeezed by rising costs, operational complexity and the need to keep investing in innovation to stay competitive. Although many know where the inefficiencies lie, adoption is weak with accountability dispersed.

Benefits of improving GNFR maturity

With GNFR across UK fashion retail previously estimated to reach £3.9bn in 2025, this represents a 2.2% increase on 2024. Added to this, fashion retailers struggle with increasing returns rates, which drives a greater need for consumables, transit packaging and processing materials. GNFR represents one of the few remaining levers available to protect margins without undermining customer value.

As part of the pressure building in day-to-day operations, GNFR items are escalating in cost. The GNFR domain seeing the highest cost increase in the last year is office and IT consumables cited by more than a third (36%) of retailers. Packaging and consumables were also cited by a quarter of respondents. These items are representative of inescapable costs that retailers must absorb, manage, or mitigate through greater efficiency. Taking a holistic approach to consolidation of suppliers can achieve a significant reduction on the cost at scale.

GNFR optimisation benefits go much further than cost reduction. Over a third (35%) of retail leaders surveyed would reinvest their savings on consumables into innovation and transformation. By investing in retail technology and marketing they are prioritising ways to attract and keep their customers loyal. This positions GNFR management as a strategic enabler of long-term growth and resilience.

The retailers surveyed by CCS McLays estimate that improved GNFR visibility and governance could lift sector operating profits by more than 8%, without additional stores, staff, or customer price increases. Improvements in GNFR discipline are essential to unlock real savings, build resilience, and free up investment for transforming their customer experience.

Only executive ownership will drive change

As inflationary day-to-day office, IT and packaging consumables continue to be a pressure on retailers, those retail leaders who haven’t already should investigate ways to improve their GNFR management. CCS McLays has developed The Hidden Value Index, a structured framework that assesses GNFR maturity across transparency, efficiency, innovation, and resilience. The Index benchmarks retailers to identify where cost wastage occurs and where focused attention will enable the biggest savings.

Before making any assessments of GNFR, assembling the right team for ownership is essential, one which crucially has clear senior ownership to achieve meaningful progress. Executive teams that change their culture around consumables from something that happens to their business into proactive core planning for 2026, will unlock a clear business advantage.