ASOS
(1) You are unable to recruit the amount of staff that you require and (2) Inflation increases so consumers start to spend less.
As ASOS is strictly online retailer the problem of not being able to recruit the amount of staff required it would slow down production or even being it to a complete halt. Being online the amount of staff within head office and the distribution centres are crucial to the process. If recruitment cannot be done to the right capacity it may cause the company to struggle which may eventually lead to bankruptcy.
Asos can’t afford to employ as much staff as they would wish due to their overall profits being down. The business will not have enough money as a whole and cannot afford to pay the employees’ wages, having to make them redundant. Redundancy is where a company cannot afford to pay their employees anymore and have to ‘let them go’.
When inflation rises this has a knock on effect to retailers, raising their prices due to compensate their losses. This makes the consumer feel less inclined to part with their money, because of the increase in price ASOS would now offer an incentive like a sale or free delivery to ensure they keep their customer’s loyalty.
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