A new report by Source Fashion and Insider Trends, recent changes to EU customs regulations could significantly impact sourcing operations for UK retailers.
The report, titled ‘The State of Sourcing Report: Sourcing and Sustainability in 2025’, is based on a survey of UK retailers of all sizes. It provides insights into current sourcing practices and sustainability trends in the retail industry. The report also includes data tables, quotes, and case studies from industry leaders.
Sourcing practices
• The majority of UK retailers (74 per cent) source internationally.
• China is the most popular sourcing region (49 per cent), followed by the UK (42 per cent), India (37 per cent), and Western Europe (33 per cent).
• Cost of production is the primary reason for choosing sourcing regions (46 per cent of respondents).
• Smaller companies are more likely to source from closer regions due to various factors like preference, shorter lead times, or barriers to sourcing from further afield.
The report highlights that in February 2024, the EU removed customs duty exemption for goods valued at less than €150. This change could potentially affect 2.3 billion items that were previously imported duty-free into the EU in 2023. The report suggests the new regulations could shift sourcing operations away from China towards other regions. While China remains attractive for its established production capabilities and supply chains, pressures on the country might make it less appealing. India, with its growing importance as a sourcing region, could be a potential alternative. The report includes case studies of companies like ASOS, Boohoo, and Asda's George fashion range, which have faced scrutiny over their sustainability claims. These cases highlight the need for clear guidance and collaboration within the industry to tackle sustainability challenges effectively.
The new EU customs regulations could have a significant impact on sourcing operations for UK retailers. The report recommends that retailers adopt a more agile approach to their supply chains and consider diversifying their sourcing regions. It also emphasizes the need for industry collaboration and clear guidance on sustainability practices.
