Retailers are looking to reduce store overheads and introduce more in-store promotions amid concerns over a profit squeeze in the year ahead.
According to the data, almost half of retailers said they were not confident that their profits would rise this year – an increase of 4% on 2023 figures. The main reasons cited were increased costs such as energy bills, national minimum wage and rising rent coupled with the cost-of-living crisis and the impact of retail crime.
However, the latest of Newtrade Media’s quarterly Sentiment Tracker surveys also showed that retailers are finding innovative ways to tackle the potential decrease. While 60% said they were reviewing store overheads, almost half were looking at effective and more frequent in-store promotions as a key profit driver.
Others were analysing how to maximise sales from existing areas as well as adding new areas to their store. Food-to-go features as one of the key opportunities for the next 12 months. More local produce, new lines and categories, and home deliveries also appeared in the top five opportunities.
Natalie Lightfoot, of Londis Solo Convenience in Glasgow, explained: “I’m focusing heavily on marketing the services we provide to our customers and getting our delivery numbers up to an average of 100 customers per day. I’ve also worked hard at developing relationships with manufacturers to get new products first and the best deals.”
Despite impending legislation banning disposable vapes, there is also confidence among retailers that vaping and next-generation products will still be able to offset some cost pressures.
Shakir Shakoor, of Weaver Row Newsagents in Stirling, said: “Vapes have been a life-saving category, but customers tend not to change until they have to. When that happens, I believe the market will settle down and it will continue to be profitable. We are already trying to educate people about alternative products at the till.”
Stefan Appleby, Newtrade Media’s head of retail engagement, said: “Our latest report confirms what we hear every day – that constant financial and legislative pressures store owners face are impacting their confidence in driving sales and profits. Despite this, the best retailers are facing the challenges head on.”
The survey showed stores taking greater sales than the same period a year ago were significantly more likely to be focusing on local products, marketing their store, adding new products and adding new services than those whose sales fell or remained flat.
Stores with a worse year-on-year performance were more likely to focus on increasing prices, cutting opening hours and buying from different wholesalers.
Comments
This article doesn't have any comments yet, be the first!