Retail SMEs predict tough autumn ahead, finds Index

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Q3 retail business prospects

Q3 retail business prospects

Small firms operating in the retail sector believe the current difficulties they face will get worse – not better – as the year progresses, with more believing prospects will worsen, according to the Federation of Small Businesses’ Voice of Small Business Index.

Nearly two-fifths (37%) of businesses responding to the survey said, ignoring seasonal variations, they expected their prospects to be worse in the next three months; compared to 21 % that expect to see an improvement.

Confidence in the sector has been low, with the Small Business Index – which measures the confidence of small businesses across the UK – being in negative territory since the start of 2010. In Q2, retailing businesses had an Index of -25, seven points lower than the -18 confidence figure at the end of the first quarter.

John Walker, national chairman, Federation of Small Businesses (FSB), said: “Businesses in the retail sector are feeling the brunt of the consumer downturn more than most sectors, as customers stay away from shops and household budgets are squeezed. Many shops started summer sales early to get customers through the doors – but continued periods of discounting will not help the bottom line.

“The FSB has called for the Government to reduce VAT in the tourism and construction sector to five per cent. Making the UK a more desirable place to visit will help retail businesses as more tourists visit the country and spend their money here.”