New research has revealed that small retailers are looking for creative ways to grow their businesses.
The latest Australian Retailers Association (ARA) and American Express Small Retail Index found that 67 per cent of small retailers are looking for innovative ways to acquire new business, 57 per cent are focussed on encouraging customer loyalty, and 30 per cent are looking to improve online engagement with their customers as a priority.
The report painted a mixed picture of performance in a time characterised by a cost-of-living crisis and small business struggles. While 51 per cent of Australian small retail businesses are performing below or significantly below their financial expectations, 49 per cent are meeting or exceeding their financial forecasts.
The research also noted that small businesses have expressed concern about the slowdown in consumer spending (59 per cent), wage costs (46 per cent), costs of goods and services (42 per cent) and cashflow management (32 per cent) that could occur in the next 6-12 months.
ARA CEO Paul Zahra commented that the research confirms many small businesses are doing it tough, yet still seeking opportunities for growth.
“Small businesses are a crucial part of the retail community, and a bellwether for the health of our sector. 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,” Zahra said. “Whilst unsurprising, it is concerning to see that fears around wage costs are on the rise.”
Robert Tedesco, American Express Vice President of Global Merchant Services Australia, added that 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 focussing on helping to drive more business through their doors,” Tedesco said. “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.”
Also of note in the research is the finding that 89 per cent have said that they 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) being highest among the solutions.
Zahra stated that the ARA will continue to advocate for relief measures from the Federal Government for small businesses.
“We need urgent action to ensure Australia’s $420 billion retail economy not only survives but thrives,” he said.
