SME Retail Entrepreneurs must think outside the box in the wake of rising wages, weaker pound and workplace pensions…
British Retailers are dealing with wage increases, increased cost of imports due to weaker pound and legal enforcement of workplace pensions. Whilst BIG brands like Unilever can afford to pass on increased costs to the consumer, many SME Retailers are saying these costs are manageable.
SME’s like Wharfdale Convenience Store have altered their opening and closing times to better manage and accommodate their foot fall and daily sales to compensate these rising costs. As a result sales and margins are better despite rising costs as Wharfdale have accommodated their consumer demands by opening an hour earlier and closing and hour earlier to optimise foot fall which tends to be higher in the morning when consumers queue for their breakfast and coffees.
Similarly Ocushield, a start-up specialising in blue tinted phone screens to protect against eye strain have also decided to absorb the rising costs by introducing delivery costs together with venturing into new markets by introducing non-prescription blue tinted spectacles which has a higher profit margin to compensate against rising costs. Dhruvin Patel, Founder at Ocushield says “In a way, the weak pound has helped us grow faster. We were likely to move into glasses at some stage, but the rise in our import costs forced us to act earlier than anticipated,” says Patel.
Nick Shanagher, Managing Director of Newtrade, an Independent publisher within the retail sector based on their research has also found that many Retailers are struggling to pass on the rising costs to the consumer. Instead Many Retailers are working to better understand their consumer data so that they better understand what consumers want to buy and when so they can optimise sales and accommodate foot fall.
Bivek Sharma, Head of Small Business Accounting, KPMG suggests Entrepreneurs need to have the right attitude by managing their resources and optimising new opportunities. His view is that businesses should look at the long term view and re-engineer their cost base rather than be tempted on clamping down on investments.
The good news is that rising costs can awaken businesses to think outside the box and realign their business to move with the times making them innovative and stand strong in a competitive market place by better utilising their resources and better understanding their consumer trends.
Source: Amdas findings are based on retail intelligence from Newtrade and the Guardian.