Preparing for a less predictable world 

Extreme weather, cyberattacks, geopolitical tensions, energy disruption and infrastructure failures are creating a wider range of risks for retailers and suppliers. The impact can reach stores, payments, technology, supply and consumer demand, often at the same time. While businesses cannot prepare for every possible event, they can make choices that give them more room to respond when normal operations are interrupted. 

Some retailers are already taking a more deliberate approach. Salling Group is developing a network of over 50 emergency-ready Bilka, føtex and Netto stores across Denmark. Equipped with backup power, offline payments and additional stocks of essential products, the stores are designed to operate for at least 48 hours without normal electricity or external connections. By 2027, the network is intended to put around 80% of Denmark's population within 50 kilometres of an emergency store. 

Payment infrastructure is moving in a similar direction. Mastercard is expanding offline payments across Europe from 2027, allowing transactions to continue when normal connectivity is unavailable. The capability is already deployed in Denmark, Sweden, Estonia and Latvia, providing an alternative when increasingly digital payment infrastructure is disrupted. 

These investments entail maintaining infrastructure and capabilities that might rarely be needed. For Salling Group, that means generators, emergency stocks and payment capabilities sitting ready for an event the retailer hopes will never occur. Greater resilience inevitably carries a cost, which makes deciding where to build it back into the business increasingly important. 

Resilience has a demand side too 

Unpredictability can change consumer behaviour quickly. The UK's recent Be Ready campaign asked households to prepare for three days of disruption to services including power, water, phones and the internet. Within days, Iceland reported tinned-food sales up 40%, while Maplin saw torch sales almost quadruple and sales of radios and power banks double. No emergency had taken place. The possibility of disruption was enough to change purchasing behaviour. 

Preparedness is not confined to the UK. The European Commission Preparedness Union Strategy covers risks including geopolitical conflict, cyber threats, climate impacts and natural hazards, with a goal of improving people's ability to sustain themselves for at least 72 hours during an emergency. Japan has similarly encouraged households to maintain emergency supplies for at least three days and preferably a week. 

For retailers and manufacturers, disruption is becoming harder to plan around because it can affect both demand and the ability to serve it. Severe weather, for example, can increase demand for water, ambient food, batteries and other essentials while also disrupting stores, transport or power supplies. Forecasting can help anticipate some of these shifts, but businesses also need enough flexibility to respond when demand moves faster than their normal operations can accommodate.

Where redundancy could earn its cost 

Redundancy has often been treated as inefficiency. Additional inventory ties up working capital, backup systems require investment and maintenance, multiple suppliers add complexity, and spare capacity can lower asset utilisation. The cost of maintaining an alternative is visible every day, while the cost of operating without one may remain hidden until something fails. 

Salling Group's approach is interesting because it is selective. It is not attempting to make every one of its more than 750 Danish stores capable of operating independently through a crisis. Instead, it is strengthening a defined network that can maintain access to essential products when other stores may be unable to operate. This creates resilience without trying to eliminate every vulnerability across the business. 

The choices will vary across retail and CPG. In stores, backup power and offline payments can keep essential services running during an outage, as Salling Group is demonstrating in Denmark. Elsewhere, resilience might come from maintaining manual fallbacks for critical automated processes, reducing dependence on a single technology platform or ensuring operational knowledge is not concentrated in too few people. Across sourcing and manufacturing, alternative suppliers and the ability to shift production between facilities provide different forms of protection, a key theme explored in Supply Chain of the Future: Building Resilience and Growth. The common principle is to identify where losing one asset, system, supplier or capability could materially affect the ability to trade, then decide whether the cost of an alternative is justified. 

Rethinking the economics of efficiency 

Retailers and CPG companies still need to reduce costs, improve productivity and use assets effectively. Increasing disruption means the calculation needs to include the potential financial and operational consequences of having no alternative, rather than measuring efficiency solely through the everyday cost of maintaining one. 

That could change investment decisions well beyond the supply chain. Closing a store, consolidating technology onto one platform, automating a process or reducing staffing can generate measurable savings, while also concentrating dependencies elsewhere in the business. But redundancy need not mean maintaining two complete versions of everything. Salling Group's emergency-store network shows how additional resilience can be concentrated in selected assets rather than spread across an entire business. 

Retailers and CPG companies also need to understand where their dependencies intersect. A store with backup power still needs products and working payments, while a factory with spare capacity remains dependent on ingredients, packaging, people and technology. An ecommerce operation may have resilient technology but remain dependent on distribution capacity. Mapping these connections can expose places where a relatively small investment in flexibility protects a much larger amount of sales or operating capacity. 

Resilience is becoming an investment choice rather than simply a risk-management exercise. Retailers and CPG companies need to know where a relatively small amount of spare capacity, duplication or flexibility could prevent a much larger loss of sales or operating capability. The commercial discipline will be knowing where redundancy is expensive, and where its absence could be considerably more costly.