As Boris Johnson requests another Brexit negotiation extension and calls a general election, new research finds that it is the biggest challenge facing SME retailers in the next 12 months.
More than a quarter (27%) of SME retailers said that Brexit presents the most significant threat to them, in the study conducted by innovative finance solutions provider, Duologi.
The new research also found that almost two-thirds (62%) of retailers currently feel unprepared for Brexit as the UK enters general election limbo, and the future of European trading relationships are unclear.
A further quarter (24%) cited a need to keep up with new technologies as their biggest challenge, as small businesses struggle to establish an online presence and stand out on the high street, as they have significantly lower budgets than national and international competitors.
12% of SME retailers believe the decline of the high street will be the hardest hurdle to overcome in the coming year, as its well documented demise in certain areas of the country continues.
A further one in 10 (11%) fear bigger players like Amazon will steal their customers, as it is able to offer lower prices and has greater visibility online.
Michael Bevan, CEO of Duologi, says: “With political uncertainty continuing into the new year, SME retailers are still unclear on how this will affect them and how they can prepare. Despite additional resources being made available ahead of an exit from the European Union (EU), deadline extensions scupper existing plans and safeguards, putting small businesses in a difficult position. The economic uncertainty also fuels further consumer hesitancy when it comes to spending on significant purchases, as they are unclear on what the immediate impact of an EU exit means for them."
Bevan continues: “Keeping up with new technology and investing in the latest innovations is also a worry for a large number of businesses, who are restricted by budget and lack of knowledge in the ever-changing area of technology. Larger businesses are also able to outspend smaller competitors and invest in their own unique innovations.”
Home and DIY retailers feared Brexit the most, while fashion, jewellery, sports and leisure retailers all listed keeping up with technology as their biggest challenge in the coming year.
Bevan says: “However, there are simple measures which can be put in place to safeguard a business that trades frequently with the EU. Alternative POS finance options allow small businesses to move with the times and the demands of the consumer, making existing business models sustainable and even increasing number of purchases and revenue, in the process. POS finance options are quick and easy to implement, even for SME retailers, and can make paying by finance as easy as paying with a card.”
Worryingly, less than half of SME retailers are confident they will be thriving in a decade, as the various business challenges take their toll.
The report by Duologi, Finance: an SME issue, surveyed 500 SMEs across a range of retail sectors about their concerns for the future and their knowledge and understanding of point-of-sale (POS) finance.