CIPS & RS: Inflation Biggest Procurement Concern in 2025
New research from RS and the Chartered Institute of Procurement & Supply (CIPS) uncovers how procurement professionals are adapting to mounting challenges.
From inflation to sustainability, the findings highlight a profession striving to manage risk, streamline operations and contribute to environmental goals, all while navigating one of the most challenging periods for procurement in recent memory.
"People working in procurement face some of the most challenging conditions the profession has ever seen," explains Raj Patel, Managing Director for UK&I at RS.
"Not only must they wrestle with external factors such as inflation, geopolitical tensions and supply chain disruptions, but theyâre also under increasing pressure to make a tangible contribution to organisationsâ wider carbon-reduction efforts."
Inflation and risk reshape procurement priorities
Inflation remains the most pressing concern, with 62% of respondents identifying it as a major issueâup from 37% the previous year.
Despite a decline in headline inflation rates, longer-term contracts expiring mean organisations are now facing cost increases in key spending areas.
Supply chain risks are another growing concern, with 47% citing it as a challenge, up from 31% in 2023. Political uncertainty, too, is a worry for 37% of those surveyed, compared to 20% a year earlier.
Another emerging difficulty lies in recruitment. Attracting and retaining talent has become tougher, with a third of professionals highlighting it as a challenge, compared with 29% last year.
In response, procurement teams are increasingly focused on building closer relationships with suppliers.
Half of the surveyed organisations plan to consolidate their supplier base. However, this ambition is offset by an 18% rise in the average number of suppliers used, climbing from 75 to 92. Larger organisations now work with an average of 120 suppliers, underscoring the complexity procurement professionals face.
Sustainability takes centre stage
Sustainability and ethical procurement are now major priorities for organisations.
The number of companies with a sustainable procurement policy has doubled from 26% in 2023 to 53%.
Similarly, plans to reduce carbon footprints have risen from 21 to 48%. Waste recycling remains the most popular strategy for lowering carbon emissions, implemented by 72% of respondents. Energy management and reduced energy usage are also common tactics, with 58% and 56% employing these measures, respectively.
Helen Alder, Head of Knowledge & Learning Development at CIPS, links this shift to a combination of regulatory pressure and long-term goals: "2030 is approaching quite fast, and that's when decarbonisation is supposed to be hitting really hard.
"But the Corporate Sustainability Reporting Directive, a European piece of legislation, is also moving organisations towards having to report on their carbon in a similar way to finances."
Yet, economic pressures are tempering enthusiasm for sustainable procurement. While 62% of respondents are still willing to pay more for sustainable products, this figure has fallen from 82% in 2023.
A significant 38% now say they wouldnât pay a premium, likely reflecting the impact of inflation on budgets.
However, Liam Kettlewell, Commercial Director at RS, emphasises the importance of long-term value: "If itâs a product with more expensive materials that is going to last three or four times longer, then the increased cost could very quickly be recouped."
Digital tools offer a lifeline
Technology is becoming a vital tool for procurement teams looking to balance efficiency and sustainability.
More than six in 10 professionals now rely on digital procurement systems such as eProcurement platforms (47%) and supplier punchout systems (15%).
These tools are favoured for improving spend visibility, cited by 75% of respondents and for reducing the time it takes to order products, noted by 70%.
Procurement cards, once a popular choice for immediate purchases, have fallen out of favour, with usage dropping from 25% to 16%.
Agata Evans, Global Procurement Manager at RS, explains why digital systems are now preferred: "People now understand the need for a digital procurement system so they can then improve efficiency and buy smarter.
"These tools give you the full visibility of the spend, but also make sure that everybody procures through compliant vendors."
By adopting technology, organisations aim to consolidate their supplier base (66%), reduce process costs per order (68%) and gain access to better management data (69%).
Digital tools also help ensure compliance with sustainability targets, providing the oversight necessary to meet ESG requirements.
With inflation, supply chain risks and sustainability pressures continuing to mount, procurement professionals are navigating a complex and fast-changing environment. Yet, the findings highlight a profession rising to the challenge with innovative strategies and tools.
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