Nearly nine in 10 retailers (86%) are prepared for continued inflation, higher interest rates and potentially lower consumer spending, according to new research from leading parcel delivery company, CouriersPlease (CP).
The research also found that nine in 10 (89%) respondents rated their business success as good or excellent so far this year, indicating they are in the best position they can be to buffer negative economic impacts.
CP presented respondents with a list of eight actions that a business is likely to have made in the last two years to weather a tougher economic environment. The majority (86%) selected at least one change, indicating they are prepared for inflation and high interest rates. Specifically, more than one-third (36%) revealed they had boosted their investment in ecommerce and marketing and 35% gave their workforce flexibility. Nearly one-third (32%) expanded their product range.
Other changes retailers made were reviewing suppliers and switching or renegotiating supplier contracts (chosen by 29% of respondents); introducing more efficient technologies (chosen by 23%); improving customer service (23%); tapping into new customer segments or markets (21%); and transitioning sales online or closing bricks and mortar stores (19%).
CP asked retailers what negative impacts their businesses are likely to counter this year. More than half (53%) of the retailers surveyed said they expected their profits to be squeezed, while 50% said they will experience lower revenue due to lower consumer spending, and 41 per cent will struggle to keep prices reasonable for their customers.
“The results confirm the widespread impact the current environment is having on the business sector. It appears that the economic climate will have the most impact on a company’s bottom line, with profits and revenue expected to take a large hit,” CP CEO, Richard Thame said.
“With the CPI currently at 5.1%, and an increase on the horizon, as well as interest rates continuing to climb, retail and logistics businesses will look for efficiencies across operations and other business areas to buffer these impacts.”
Just one in 10 (10%) of retailers revealed their business would not be impacted at all. This small proportion immune from the impact of the current environment was also similar across business sizes: just 8% of micro businesses and 13% of small to medium-sized businesses said they wouldn’t be impacted by inflation and rate rises.