This paper focuses on the retail sector in the South East, including the motor trade and wholesale. There are around 83,000 retail SMEs (including sole traders) across the South East, employing around 567,000 people. More than half (56%) are in the "shops & stores" sub-sector.

1. South East Business Monitor
Survey of Business Owners and Senior Decision Makers
Hot Topic Flashlight
The Retail Sector
August 2009
About this research
Key Messages This paper focuses on the retail sector in the South East, including
the motor trade and wholesale. There are around 83,000 retail
• Retail (including motor and SMEs (including sole traders) across the South East, employing
wholesale) accounts for a around 567,000 people. More than half (56%) are in the "shops &
substantial part of the South stores" sub-sector.
East economy, with 83,000
SMEs, over half of which are Recession and Recovery
shops The retail sector has been affected similarly to all SMEs. 50% say
they have been negatively affected by recession. Wholesalers and
• Retailers have seen those in rural areas have suffered more (54%).
reductions in spend per
customer during the Half (49%) are anticipating turnover growth in the coming 12
recession, but not necessarily months, and 18% expect to take on staff in that period. Confidence
a drop in customer numbers of survival is high (78%), and retailers are more upbeat than other
SMEs that they are poised for the economic recovery (72%).
• The retail sector is confident
for its future. About 3 in every Attitudes to recession and recovery (%)
4 retailers feels ready to take
100
advantage of the upturn, and
is expecting to survive the 78 78
80 72
recent difficult conditions 68
60
• Confidence is especially high 44
50
among those with a website, a 40
wide and/or loyal customer
base, and wholesalers. 20
• The main challenges for 0
I feel confident that my The recession will hit I think my business is well
retailers are responding to business will survive the businesses in my sector placed to take advantage when
competition and improving recession particularly badly the UK economy recovers
staff skills. Skills gaps vary % of retail SMEs % of all SMEs
depending on the sector. Source: South East Business Monitor, June-July 2009. Bases: xx
Customer Service is a general
skills need, while the Motor Those most confident for the future include:
sector in particular points to • Retail SMEs with a website
Sales & Marketing skills • Those with loyal (repeat) customers
gaps. • Wholesalers
• Those with a wide customer base

2. Hot Topic Flashlight: The retail sector
Winning and keeping customers
Although only 24% of retailers have seen a drop in customer
These are highlights of the findings numbers over the past 12 months, 42% report lower spend by
from the South East Business customers. Broadly, shops and stores have seen an increase in
monitor. Every four months, at least customers, with lower unit spend, while wholesalers and the
1,200 telephone interviews are motor trade have stable customer numbers, but lower unit
conducted with business owners and spend. This could all result from the discounting activity which
senior decision makers of small and 53% of retailers have undertaken to respond to the downturn.
medium –sized enterprises (SMEs),
based in the South East. This allows Actions taken to respond to recession/ prepare for recovery
an ongoing “temperature check” of Retail
business issues and concerns. The SMEs (%)
survey results are weighted to reflect Used discounts and sales to attract customers 53
the size and structure of the region’s Used different methods of marketing or advertising 46
SME population. Sought cheaper suppliers 44
Invested in new or different types of stock 43
For the full Hot Topic Spotlight report Implemented waste management activities to cut costs 36
on the Retail Sector, email: Revised the business plan 31
siobhan.smith@businesslinksurrey.co.uk Trained staff or investigated training options 20
Source: Business Link South East Business Monitor June-July 2009. Base: Retail SMEs=
Other recent research reports 360, All SMEs = 1,223.
include:
The challenges facing retailers vary depending on whether the
• Home based businesses
• Green Opportunities for SMEs
SME is part of a chain or wider group. For those that are, key
• Credit & Cash Flow challenges are; Responding to competition (65%), Improving staff
• Stress in the Workplace performance/skills (64%), Reducing waste/improving energy
• Public Procurement efficiency (61%), developing management/leadership skills (46%)
• Enterprise among the Over 55s and recruiting skilled staff (40%).
• Women’s Enterprise
Main skills needs identified by retail SME owners to help their
businesses grow vary by sub-sector:
• Sales and marketing - esp for motor trade (48%)
• Customer service for all sub-sectors (25%)
• IT skills - especially for wholesalers (38%)
• Finance/accounting esp for motor trade (27%)
Business Link’s retail expert, Kerry Kyriacou says:
“This research shows a much more positive outlook
from the retailers surveyed than we would expect
during the current economic climate. These findings
demonstrate the resilience of retail owners and their
ability to adapt and change according to external
economic influences.
Business Link can help retailers identify areas of
improvement, whether it be to attract more customers,
increase the unit spend per customer or
improve their stock turn. It is certainly
worth retailers engaging with their
local business adviser for a free
business health check.”
For the full Retail Hot Topic Spotlight report
email: siobhan.smith@businesslinksurrey.co.uk