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Consumers are still shopping at small businesses despite costs
C onsumers are still shopping at small businesses despite the cost-of-living increases , new research by GoCompare has revealed .
A recent poll by the insurance comparison site found that over threequarters ( 78 %) of UK adults back small shops , showing their support for independent companies during tough times . SMEs are likely to welcome this support as they are at a higher risk from the recent price increases due to slimmer profit margins ( when compared to large enterprises ).
Surprisingly , over two-thirds ( 67 %) of consumers said that the cost-of-living increase has had no impact on their decision of whether or not to shop small . Although 33 % admitted it had changed their view , this wasn ’ t all bad news for business owners ; over a quarter ( 27 %) of those whose minds had been changed said they were now shopping at small businesses more often to support them with rising costs .
“ Rising operating costs are eroding small business margins in a way that many have never experienced before ,” said Martin McTague , National Chair , FSB . “ Unlike big corporates , small firms don ’ t usually have the leverage to negotiate the best deals on utilities , which are the primary driver of higher outgoings for many . Small firms find it hard to pass on higher costs to customers in the form of higher prices , fearing that doing so would add extra burden to consumers under the current cost of living crisis , but more and more are being left with no choice .”
“ During a turbulent time for small businesses and consumers alike , it ’ s great to have some positive research which confirms that shoppers are still supporting local and independent companies ,” added Matt Sanders , Business Insurance Expert at GoCompare . “ Unfortunately , due to continued rising costs , more businesses will likely need to pass prices onto the customer . In this case , SMEs must focus on delivering a quality service that keeps people coming back .”
The report also finds that the cost-ofliving crisis has impacted consumer buying habits and reveals that Brits will cut down on certain goods and services to save money . Takeaways and other food service companies are most at risk , as 50 % of UK adults say they will give up ordering their meals and 42 % say they will stop dining out .
According to recent UK government data , 27 % of businesses have reported the need to pass on price increases to the customer .
The hospitality industry had the greatest need to do this , suggesting customers are seeing the highest cost increases in this sector – which could be the reason that consumers will cut these services from their budget .
Other companies at risk of losing custom include streaming giants such as Netflix and Spotify . Over a third ( 34 %) of respondents say they will unsubscribe to such platforms as money becomes tighter . �
IT ’ S GREAT
TO HAVE SOME POSITIVE RESEARCH WHICH CONFIRMS THAT SHOPPERS ARE STILL SUPPORTING LOCAL AND INDEPENDENT COMPANIES .
Intelligent SME . tech