Small retailers are looking for innovative ways to grow their business amidst fears of slowing consumer spend and wage costs concerns.
The latest Australian Retailers Association (ARA) and American Express Small Retail Index found that about two-thirds (67 per cent) is looking for innovative ways to acquire new business, more than half (57 per cent) is focused on customer loyalty and nearly a third (30 per cent) wants to improve online engagement with their customers.
ARA CEO Paul Zahra says the research confirms many small businesses are doing it tough yet are seeking opportunities for growth.
“Small businesses are a crucial part of the retail community and a bellwether for the health of our sector,” he says.
“This research demonstrates resilience amongst the small business cohort despite tough times. Unfortunately, many are struggling to cope with rising inflation, steep interest rates and the cost-of-doing-business crunch.”
Indeed, just over half (51 per cent) of Australian small retail businesses is performing below or significantly below their financial expectations, while nearly half (49 per cent) are meeting or exceeding their financial forecasts.
The research found the top four concerns for small businesses for the next six to 12 months are a slowdown in consumer spending (59 per cent), wage costs (46 per cent), costs of goods and services (42 per cent) and cash flow management (32 per cent).
“Whilst unsurprising, it is concerning to see that fears around wage costs are on the rise.”
Most (89 per cent) survey respondents said they have incurred higher costs in the past 12 months. Small retailers reported using a combination of measures to deal with those increased costs such as passing costs onto consumers (51 per cent), reducing margins (47 per cent), finding savings in other areas (37 per cent) and reducing staff (37 per cent).
Robert Tedesco, American Express vice president of global merchant services Australia, says supporting small business owners is critical for maintaining vibrant communities.
“Small businesses are the backbone of the local economy, which is why American Express is focusing on helping to drive more business through their doors,” he states.
“Initiatives like the American Express Shop Small campaign, underway now through 31 August, can help to make a difference by connecting shoppers with local retailers and reminding shoppers that every dollar spent with a small business contributes to the vitality of their communities.”
