Seven in 10 retailers deferring business decisions to stay afloat: Report
Wednesday, May 16, 2012/
Almost 70% of Australian retailers were more likely to defer business decisions within the past 12 months as a result of recent economic issues, according to the latest Sage Business Index.
The 2012 Sage Business Index includes input from more than 500 businesses across Australia. It also makes key comparisons with last year’s index results.
According to the index, 36% of Australian businesses feel they are performing better now than in 2011, while 21% report that their business performance is worse.
Not surprisingly, retailers appear to be the most pessimistic – 69% were significantly more likely to report deferring business decisions within the past 12 months due to economic conditions.
This compares to a deferment rate of 53% among all businesses. The top areas of deferral within retail include marketing and advertising spend (43%) and developing new business areas (31%).
Retailers are also more likely to have deferred decisions relating to the opening of new premises, stores, offices or franchises (30% of retailers compared to 13% of all businesses).
But it doesn’t stop there. More than one third of retailers have deferred pay rises, compared to 27% of all businesses.
Additionally, three in 10 retailers report postponing the recruitment of new staff, compared to one quarter of all businesses.
More than half of retailers say they have employee plans in place, yet more than 70% say they still struggle to find appropriately skilled staff (compared to 59% of all businesses).
Almost one third of retailers increased their use of contractors or part-time staff during the past year, while 48% say they are actively considering using older staff to help with staffing issues.
In addition to retailers’ actions and intentions, the index reveals some interesting insights into the attitudes and priorities among female managers and business owners.
“Despite the overall atmosphere of caution and concern that is permeating the business sector, women are feeling generally more positive about the future,” the report said.
“Of those surveyed, 39% said they felt more confident now than they did at the same time last year – an increase of 13% on 2011.”
“Over the same time period, confidence among male business owners decreased 1%.”
“At the same time, the number [of female respondents] who said they were feeling less confident dropped from 25% in 2011 to 21%.”
According to Sage, this finding is particularly interesting when compared with male respondents. In that group, 42% said they were feeing less confident now than in 2011 – an increase of 13%.
When asked to nominate priority areas for spending, if a bigger budget became available, female respondents appear less inclined to spend on marketing in 2012 compared with 12 months ago.
At that time, 30% indicated it was a priority. That has dropped to 23% in 2012, suggesting female entrepreneurs are less concerned about the need to promote their businesses.
Male respondents, however, appear much more marketing-focused, with 51% nominating marketing as a priority, an increase of 4% since 2011.
At the same time, extra spending on sales was nominated by 21% of female respondents, up from 16% in 2011.
This still falls significantly behind the 38% of male respondents who would like to spend more on sales in 2012.