UK fashion brands’ sourcing and sustainability: A mixed bag in 2025
The report, titled “The State of Sourcing Report – Sourcing and Sustainability in 2025,” was produced in collaboration with retail trend experts Insider Trends, a retail trend analysis firm. The report reveals a landscape marked by significant progress in global sourcing methods but also indicates a disjointed and cautious stance toward sustainability initiatives.
The survey provides insights into the strategic considerations of UK brands and retailers, ranging from small to major enterprises to established conglomerates, as they confront an intricate international environment.
It examines the origins of product sourcing, the rationale behind regional selection, the influence of sustainability objectives on business planning over the next year to year and a half, and the factors driving these shifts.
The survey draws attention to the intricate nature of sourcing determinations. While certain retailers are expanding into international markets, others prefer to stay local due to factors such as cost considerations, available capacity, or specific strategic objectives.
For those contemplating cross-border sourcing, there is no universal strategy; each company must weigh its individual challenges and prospects.
International Sourcing: A pivotal element in retail tactics
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The survey indicates that 84% of businesses with a workforce exceeding 50 employees and 71% of smaller ventures engage in international sourcing.
Prominent sourcing hubs identified include China accounting for 48.8%, the UK at 41.6% and India and Western Europe at 36.8% and 32.8% respectively. .
For larger entities, areas such as Southeast Asia and Turkey also stand out as key sourcing locales, signifying an extensive international presence.
Sustainability Leadership: Fragmented across organisations
The survey also underscores a lack of cohesion in sustainability approaches among businesses:
– Roughly 27.22% of participants have established a dedicated sustainability division led by a chief sustainability officer who delineates targets and directives.
– Approximately 27.8% incorporate sustainability within another department.
– Amongst larger corporations, a distinct sustainability department is more common (35.14%), with 21.62% having a sustainability or ESG figurehead orchestrating efforts across departments with overt support from upper management.
Factors influencing retailers’ sourcing decisions
The survey illuminates the complex reasoning behind sourcing selections:
– Production Costs: A primary concern for 45.6% of respondents, underscoring the imperative of cost-effectiveness.
– Innovation: The pursuit of novel product categories is particularly important for larger firms at 35.48%.
– Risk Mitigation: A focal point for 32.26% of larger entities, reflecting insights gleaned from recent global supply chain upheavals.
– Smaller ventures place a higher emphasis on sustainability (29.79%) compared to their larger counterparts (19.35%), indicative of escalating consumer demands for environmentally conscious products.
Unique hurdles faced by smaller enterprises
Among respondents who cited “other” as their reason for not engaging in international sourcing (15.91%), small businesses were predominant. Feedback revealed a preference for local goods, capacity limitations, and financial hurdles as reasons for staying domestic.
Sustainability initiatives halted by complexity and ambiguity
Despite rising consumer expectations and regulatory mandates, sustainability initiatives appear uneven across the sector:
– Nearly 69.23% of all companies reported advancements in sustainability over the previous year; this figure climbs to 78.38% among larger firms due to increased resources.
– Principal obstacles encompass scant resources, conflicting priorities, and apprehensions about the reputational dangers linked to greenwashing.
– One participant remarked on the challenges faced by small teams in addressing sustainability concerns amidst other pressing responsibilities.
Drivers propelling progress are identified as:
– Consumer Influence: Noted by 11.61% across various company sizes.
– Defined Strategy and Objectives: A systematic approach was mentioned by 10.71%, with performance tracking being significant for 14.29%.
– Genuine Leadership Commitment: Small businesses surpass larger ones in reporting executive backing (28.57% vs. 21.43%), likely due to tighter internal relationships.
– Notably, small firms demonstrate equal commitment to establishing precise goals aligned with Net Zero ambitions (3.57%) when compared to larger organizations (3.93%).
Moreover, the sole B-Corp respondent was a micro-enterprise with fewer than ten employees, accentuating the potential for leadership in sustainability among small-scale ventures.
Obstacles to advancement
– Progress has been made, yet hurdles remain. The reluctance of businesses to embrace sustainability varies based on their size:
– Small Enterprises: The absence of consumer demand for sustainability (50%), other pressing business matters (32.14%), and the overwhelming nature of sustainability initiatives (42.86%) are principal concerns.
– Larger Corporations: A deficiency in explicit strategies or objectives (75%) stands as the primary impediment, with other business priorities and insufficient consumer demand each accounting for half of the responses (50%).
– Notably, a lack of genuine leadership is seen as a shortfall among major companies, with 50% recognizing it as an obstacle.
Investment in Sustainability: An industry at a crossroad
The textile and apparel sector appears divided on the matter of ramping up sustainability investments within the next year to a year and a half:
– 53.62% of those surveyed are gearing up to escalate their funding, while 46.38% do not intend to increase their sustainability budgets.
– Larger corporations are notably more inclined to augment their investment, with over 12% set to double their expenditure on sustainability initiatives.
– Smaller firms remaining on the sidelines attribute their decision to several factors: over half (54.9%) believe their current sustainability measures suffice, while others point to the absence of financial benefits (17.65%) or other pressing concerns
A strategic outlook for 2025
As the retail industry looks toward 2025, the survey emphasises the necessity for comprehensive transformation in sustainability practices. Effective collaboration, decisive leadership, and forward-thinking partnerships will be crucial in aligning environmental objectives with commercial imperatives.
The survey also reveals the shifting priorities of retailers as they navigate 2025, influenced by factors such as cost management, innovation, and the imperative to confront global challenges.
While smaller enterprises often lead the charge in sustainability initiatives, larger corporations are increasingly focused on risk mitigation. This dynamic sets the stage for substantial changes in both sourcing methods and sustainability strategies within the retail sector.
Source sourcing director Suzanne Ellingham said: “This is an incredibly important piece of work and one that offers a comprehensive look at sustainability practices and challenges across UK retailers, providing insights into the current state and future trajectory of the industry’s environmental efforts. A diverse range of UK retailers, from micro-businesses to large enterprises, offer their insights into the sourcing practices providing a snapshot of the barriers and motivations shaping the industry today.
“As the retail industry heads into 2025, collaboration, transparency, and innovation will be essential for achieving meaningful sustainability progress. By pooling resources and sharing strategies, businesses can move beyond individual efforts to create systemic change. Brands and retailers must also embrace partnerships with government and regulators to develop practical, scalable solutions that balance environmental goals with business realities. With the right guidance and collaboration, 2025 could mark the turning point for sustainability in the retail industry.”
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