Business Review >
Principal Risks & Uncertainties
There are a number of risks and uncertainties which could impact
the performance of the Group. The Group operates a structured risk
management process which identifies, evaluates and prioritises risks
and uncertainties and reviews mitigation activity. Further information
on the risk management process can be found in the Corporate
Governance Statement, reference to risk is also made throughout
the Business Review. The principal risks and uncertainties are set
out below:
| Area of potential
risk / uncertainty |
Outline |
|
Examples of mitigating activity |
| Sales growth |
Delivering sales growth impacted by:
- Economic conditions
- Consumer preferences
- Competitor activity
- Seasonality
- Expansion and development of store networks
|
|
- Choice and value-led product offering
- Driving market share growth in high headroom product categories
- Multi-channel development
- Store service standards
- Development of delivery proposition
- Property pipeline
- Mezzanine investment and format enhancement
|
| Profit growth |
Increase in product and operating
costs including:
- Cost of raw materials
- General level of inflation
- Property / energy / labour costs
|
|
- Purchasing, sourcing and supply-chain scale leveraging
- Forward fixed contractual supply agreements
- Cost productivity initiatives
|
| Product supply |
Delay or interruptions in the supply of
products from third-party suppliers including products sourced
overseas.
| |
- Product substitution planning
- Management of supplier relationships
- Improvements in planning process
|
| Business interruption |
Failure or unavailability of operational
and IT infrastructure.
Delay or interruptions in the services provided by third-party
suppliers. |
|
- Business continuity planning
- IT shadowing / recovery
- Key third-party supplier management
|
| Infrastructure development / projects |
Delay or failure to manage and implement
major business and infrastructure projects effectively. |
|
- Project management
- Board review of status / progress
- Project post implementation reviews
|
| People |
Reliance on key personnel. |
|
- Succession planning
- Competitive remuneration packages
- Management development
and training programmes
|
| Regulatory environment |
Changes in UK and European legislation
and regulation e.g. consumer protection, environmental regulation.
Changes in UK fiscal / employment policy e.g. minimum wage. |
|
Engagement with government and regulators
directly and through industry representative groups |
| Currency |
Purchase of products in currencies other
than pound sterling, principally the US dollar and the euro. |
|
- Forecasting currency requirements
- Hedging policy
|
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