With consumer spending approaching six-year lows on the UK high street, small and medium-sized retailers are responding to macroeconomic pressure in the UK by expanding internationally, according to the latest Global Trade Barometer (GTB) from WorldFirst, the international payments expert.
For retailers currently trading internationally, business is booming. The quarterly survey found that the average SME retailer made overseas transfers of £54,274 in Q1 2018 – nearly double the average amount transferred in Q1 2017 (£29,517).
This growth is particularly impressive against the backdrop of a falling number of transactions over the year. The average number of international trades retailers executed in Q1 2018 fell by nearly 40% year-on-year, to just nine trades a month.
With transactional volumes falling but values rising, UK SME retailers are clearly bolstering activities in key international markets, perhaps through larger procurements or by receiving more international funds as a result of increased sales.
More support needed to capitalise on global ambitions
Despite this confident outlook, more than half (51%) of SME retailers agreed that external support would encourage them to export more.
Specifically, one in five (20%) want to see the government do more to help them trade overseas, while 17% feel they would benefit from access to some form of education on how to trade internationally.
The increasing focus on international markets has seen Brexit morph into a fading fear for many UK retailers.
More than a third (39%) are not worried about the UK leaving the EU and the impact it could have on the regions where they do business. A quarter of SME retailers (25%) disagreed strongly that Brexit would hit their business.
Nevertheless, 48% of UK SME retailers are still concerned about currency volatility, and should be seeking alternative options to best manage their international currency transactions.
Jeremy Cook, chief economist at WorldFirst, said: “The UK retail sector is in the doldrums. A combination of factors, including a weaker Sterling, higher labour costs and a squeeze on household budgets have seen retail sales tumble and well-known high street brands stumble and fall.
“In the face of this, SME retailers have had to adapt, sidestep a downbeat domestic market and focus on trading more overseas with many leveraging rapidly evolving technology to achieve success on the international stage.
“But as they forgo the UK high street, SME retailers must be supported by the government and the wider industry. If current sentiment is anything to go by, 2018 will be the year that our nation of shopkeepers becomes a nation of exporters.”