Seasonal shopping habits threaten to influence business performance
Small businesses could find themselves facing a few more financial difficulties than they anticipated this summer as seasonal shopping habits continue to influence company performance.
While all SMEs and larger corporations are aware of the increased benefits and profitability that might be available at specific times of year, recent data has shown that the UK has experienced a slight slump this summer.
According to the Office for National Statistics (ONS), retail sales fell by 0.2% between May and June despite the spell of hot weather experienced across most of the country.
This follows five consecutive months of falls although the situation is claimed to be more positive than at any other time during the past nine years.
While June’s data shows a month-on-month decrease, the figures are actually up on data recorded for the 28 months before the start of 2015; indicating, albeit slow, longer-term improvements.
Protecting against uncertainty
While this provides a slight silver lining for SMEs, it is still important that they take the necessary precautions to prepare themselves against the uncertainty of shoppers.
Poor retail sales can hit a business hard and if the owners have not prepared for the potential of seasonal slumps then they may find that their finances struggle to cover the shortfall.
In a worst-case scenario this might even lead to business rescue and other insolvency measures designed to help struggling businesses take control of their finances and get back on track.
While this can be a vital service, small business owners would do well to try and take pre-emptive measures that prevents this action being necessitated.
Managing director of the retail sector at Lloyds Bank Commercial Banking, Keith Richardson, explained that shoppers, like businesses, “do not like uncertainty”.
He said that they may be encouraged to “loosen their purse strings” in coming weeks but said that while consumers may have more cash in their pocket there remains a dominant focus on price that means “shoppers are still wedded to discounts and promotions”.
Ensuring that more of these are offered is therefore a quick way for businesses to improve their sales sheets and “avoid being left with unsold stock at the end of the season”.
By Phil Smith