South East Business Monitor
Survey of Business Owners and Senior Decision Makers
Key Messages
• Retail (including motor and
wholesale) accounts for a
substantial part of the South
East economy, with 83,000
SMEs, over half of which are
shops
• Retailers have seen
reductions in spend per
customer during the
recession, but not necessarily
a drop in customer numbers
• The retail sector is confident
for its future. About 3 in every
4 retailers feels ready to take
advantage of the upturn, and
is expecting to survive the
recent difficult conditions
• Confidence is especially high
among those with a website, a
wide and/or loyal customer
base, and wholesalers.
• The main challenges for
retailers are responding to
competition and improving
staff skills. Skills gaps vary
depending on the sector.
Customer Service is a general
skills need, while the Motor
sector in particular points to
Sales & Marketing skills
gaps.
Hot Topic Flashlight
The Retail Sector
August 2009
About this research
This paper focuses on the retail sector in the South East, including
the motor trade and wholesale. There are around 83,000 retail
SMEs (including sole traders) across the South East, employing
around 567,000 people. More than half (56%) are in the "shops &
stores" sub-sector.
Recession and Recovery
The retail sector has been affected similarly to all SMEs. 50% say
they have been negatively affected by recession. Wholesalers and
those in rural areas have suffered more (54%).
Half (49%) are anticipating turnover growth in the coming 12
months, and 18% expect to take on staff in that period. Confidence
of survival is high (78%), and retailers are more upbeat than other
SMEs that they are poised for the economic recovery (72%).
Attitudes to recession and recovery (%)
100
78 78
80 72
68
60
44
50
40
20
0
I feel confident that my The recession will hit I think my business is well
business will survive the businesses in my sector placed to take advantage when
recession particularly badly the UK economy recovers
% of retail SMEs % of all SMEs
Source: South East Business Monitor, June-July 2009. Bases: xx
Those most confident for the future include:
• Retail SMEs with a website
• Those with loyal (repeat) customers
• Wholesalers
• Those with a wide customer base
Hot Topic Flashlight: The retail sector
These are highlights of the findings
from the South East Business
monitor. Every four months, at least
1,200 telephone interviews are
conducted with business owners and
senior decision makers of small and
medium –sized enterprises (SMEs),
based in the South East. This allows
an ongoing “temperature check” of
business issues and concerns. The
survey results are weighted to reflect
the size and structure of the region’s
SME population.
For the full Hot Topic Spotlight report
on the Retail Sector, email:
siobhan.smith@businesslinksurrey.co.uk
Other recent research reports
include:
• Home based businesses
• Green Opportunities for SMEs
• Credit & Cash Flow
• Stress in the Workplace
• Public Procurement
• Enterprise among the Over 55s
• Women’s Enterprise
Winning and keeping customers
Although only 24% of retailers have seen a drop in customer
numbers over the past 12 months, 42% report lower spend by
customers. Broadly, shops and stores have seen an increase in
customers, with lower unit spend, while wholesalers and the
motor trade have stable customer numbers, but lower unit
spend. This could all result from the discounting activity which
53% of retailers have undertaken to respond to the downturn.
Actions taken to respond to recession/ prepare for recovery
Retail
SMEs (%)
Used discounts and sales to attract customers 53
Used different methods of marketing or advertising 46
Sought cheaper suppliers 44
Invested in new or different types of stock 43
Implemented waste management activities to cut costs 36
Revised the business plan 31
Trained staff or investigated training options 20
Source: Business Link South East Business Monitor June-July 2009. Base: Retail SMEs=
360, All SMEs = 1,223.
The challenges facing retailers vary depending on whether the
SME is part of a chain or wider group. For those that are, key
challenges are; Responding to competition (65%), Improving staff
performance/skills (64%), Reducing waste/improving energy
efficiency (61%), developing management/leadership skills (46%)
and recruiting skilled staff (40%).
Main skills needs identified by retail SME owners to help their
businesses grow vary by sub-sector:
• Sales and marketing - esp for motor trade (48%)
• Customer service for all sub-sectors (25%)
• IT skills - especially for wholesalers (38%)
• Finance/accounting esp for motor trade (27%)
Business Link’s retail expert, Kerry Kyriacou says:
“This research shows a much more positive outlook
from the retailers surveyed than we would expect
during the current economic climate. These findings
demonstrate the resilience of retail owners and their
ability to adapt and change according to external
economic influences.
Business Link can help retailers identify areas of
improvement, whether it be to attract more customers,
increase the unit spend per customer or
improve their stock turn. It is certainly
worth retailers engaging with their
local business adviser for a free
business health check.”
For the full Retail Hot Topic Spotlight report
email: siobhan.smith@businesslinksurrey.co.uk