Shipping delays (32%), supply chain disruption (31%) and the Covid-19 pandemic rules and regulations (30%) have been the top factors impacting retail SMEs this year and could threaten their survival in 2022, according to a new report.
The Staffing and supply report carried out by card payments specialist takepayments, showed that more than two-fifths (44%) of small businesses within the retail sector have experienced staff shortages while more than half (53%) have experienced supply chain issues.
The combination has financially impacted one in three (38%) small businesses within the sector with one in ten (10%) describing the impact as critical.
Two-thirds (64%) believe staff shortages and supply chain issues will get worse before they get better, while two-fifths (42%) said that there is a strong chance their business wouldn’t survive if both were to continue into 2022.
As for the festive period, one in five (29%) expect the supply chain and staff shortages to cause major disruption to their customers and a further one in five (21%) expect the issues to cause moderate disruption.
Retailers are attempting to respond with a number of efforts. In response to the supply chain issues, one in four (24%) businesses have introduced shorter business hours as well as limiting or changing the services they provide. A further one in five (21%) expect to change the services they provide in the next 3 months.
Regarding staff shortages, one in five (17%) have increased pay for vacancies, and a further one in five (19%) expect to do so in the next three months. In an attempt to retain their current staff one in five (22%) have increased their pay, and a further one in five (18%) expect to increase pay over the next 3 months. Over a third (38%) of retail SMEs have also introduced flexible working to retain staff as well as improving working conditions and job perks (35%).
The challenges are also impacting customers. A quarter (25%) of business owners state they have already raised prices for consumers, one in five (17%) state they plan to within the next three months and a further one in five (18%) plan to do so within the next 3-6 months.Image credits: