Research by 100 per cent carbon-neutral parcel delivery service Sendle reveals that 30 per cent of small businesses expect zero growth this year as they expressed worry about their sales performance this peak season.
The 2023 Small Business Survey also reveals a year-on-year dip in small business confidence, with 34 per cent of small businesses confident about their peak sales growth this year, compared to 42 per cent in 2022.
“Sendle’s 2023 Small Business Survey shows that many small businesses are feeling less confident about consumer demand this peak sales season, due to the impact of recent rate rises and cost of living pressures,” Laura Hill, Managing Director of Sendle Australia, said. “However, small businesses are more optimistic about growth in 2024, most likely as they’re taking a number of proactive steps to attract new customers.”
The impact of inflation and recent rate rises on household consumption is top of mind for small businesses, with 52 per cent worrying about slowing consumer spending due to cost of living pressures this peak sales season. Interestingly, only 11 per cent are worried about the higher costs of doing business this peak season.
When forecasting business performance this upcoming Black Friday/Cyber Monday/Christmas sales period, 36 per cent of small businesses expect significant sales growth, with 14 per cent expecting between 50-65 per cent growth. Small businesses in the key gifting product categories such as clothing and footwear, secondhand and vintage items, and toys, hobbies and games are most likely to forecast strong sales growth. On the other hand, small businesses in the clothing and footwear and secondhand and vintage items categories are also most likely to forecast zero to no sales growth this peak season, along with books and publishing.
The research also noted that 62 per cent of small businesses expect inflation to have a mild impact on their bottom line in 2024 and 28 per cent anticipate a high inflation environment will have a significant impact on their business. Only 11 per cent believe inflation will have little to no impact.
Despite a challenging economic outlook, 84 per cent of small businesses are forecasting online sales growth over the next 12 months, with 36 per cent forecasting up to 25 per cent sales growth. Interestingly, many of them are looking overseas for growth, with 37 per cent expecting up to a quarter of their total sales growth to come from outside Australia over the next 12 months.
Additionally, many small businesses are looking to level up their social and marketing capabilities, with 61 per cent planning to grow their social media presence and engagement in 2024. 39 per cent plan to invest in more marketing and brand awareness initiatives, to help them engage new customers and convert them into sales.
Other proactive steps include updating their pricing strategy to reflect the rising cost of living (41 per cent), expanding into new markets including overseas (37 per cent) and increasing shipping options for customers (23 per cent). Despite increasing cash flow pressures, 69 per cent of small businesses rank sustainability as a high or somewhat of a priority in 2024, and are looking at ways to be more sustainable through their practices and suppliers.
