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Industries like financial services have long refined risk management, compliance, and operational resilience, but retail is catching up. Recent regulations have hit retail hard, exposing the sector’s vulnerability to disruptions - from global pandemics to shipping mishaps and trade wars. These events highlight retail’s reliance on a fragile ecosystem.
Regulatory changes: The UK Corporate Governance Code
In 2024, the UK Corporate Governance Code introduced significant updates, notably Provision 29, effective January 2025. Boards must now formally declare the effectiveness of their risk management and internal control systems, increasing accountability to stakeholders. This shift has prompted a reckoning across the retail industry, affecting brands from small boutiques to global players.
Insights from RiskTech & Retail Experts
Provision 29 has brought governance, risk, internal audit, and compliance to the forefront for UK retail companies. The timing is ideal to discuss risk management, as the sector faces evolving challenges and increasing demands.
Common Risk Management challenges in retail
Risk management in retail is rapidly evolving. Companies must adapt or risk fines, inefficiencies, and lost sales. Common pitfalls include senior leaders being uninvolved in daily risk activities or experiencing regulatory fatigue, often overlooking risk and compliance until non-compliance results in penalties.
Turning Risk into a competitive advantage
Retailers face challenges such as returns management, consumer duty, GDPR, financial risks, and regulatory pressure. Whether focusing on digital transformation, ESG initiatives, or new payment models, hidden risks abound. Yet, many still view risk management narrowly as a means to avoid fines. In reality, effective risk management can drive resilience and profitability.
Facing Risk Head-On
The UK Corporate Governance Code is prompting more retailers to take action. Even mainstream publications like Vogue are discussing supply chain risks for high-end brands. Proactive risk management can enhance operational resilience, regardless of company size or stock exchange listing.
Modern risk management tools
Retailers are moving beyond spreadsheets to specialised governance, risk, and compliance software. As compliance grows more complex, tools like RiskSmart help companies streamline, automate, and simplify risk management.
Growing interest in retail risk solutions
Retail interest in risk management software is surging, with a 140% increase in companies seeking solutions. Leading brands such as ASOS, Autotrader, JD Sports, and Skyscanner are leveraging these tools to anticipate risks and make informed decisions.
Key benefits for retailers
- Real-time risk monitoring for better decision-making
- Broad system access without extra fees
- Enhanced reporting and risk visualisation
- Improved financial forecasting
- Custom third-party due diligence management
- Significant time savings on manual admin
- Automated company-wide notifications
The most notable benefit is improved leadership alignment and confidence in risk discussions.
“RiskSmart engages senior leaders in risk management. It’s changed how people think about risk - something spreadsheets could never achieve - and helped cascade that mindset across the business. I wouldn’t underestimate the value of that.” — Steve Folkard, Chief Risk and Compliance Officer, Jensten
