According to new research from CouriersPlease (CP), just under 9 in 10 (86%) retailers are prepared to deal with the higher interest rates, inflation and resulting potentially lower consumer spending that is set to come about this year.

CP commissioned a survey of an independent panel made up of 202 retail business owners and decision makers, with 77% of those taking part being decision makers or owners of SME retailers. Retailers involved ranged from micro (1-15 employees), small (16-50), medium (51-200) and large (200+).

When provided with a list of eight actions that a business is likely to have made in the last two years to weather a tougher economic environment, 86% selected at least one change, suggesting that they are prepared for what’s to come. Boosted investment in eCommerce and marketing was a popular choice at 36%, whilst an increase in workforce flexibility (35%) and an expanded product range (32%) followed close behind.

4% believed that their business was unable to make changes due to the negative impacts being to great.

When asked about what negative impacts businesses expect to encounter this year, 9 in 10 believed that they would be affected by inflation, higher interest and lower consumer spending. 53% specifically believed that they would suffer profit squeeze, while 50% said they would receive lower revenue due to reduced spending. 41% said they would struggle to keep prices fair for customers, 28% said they would have to postpone business investments, 21% said they wouldn’t be able to keep all their employees and 19% said they would face challenges meeting loan and rent payments.

“The results confirm the widespread impact the current environment is having on the business sector. It appears that the economic climate will have the most impact on a company’s bottom line, with profits and revenue expected to take a large hit,” said CP CEO Richard Thame.

“With the CPI currently at 5.1 per cent, and an increase on the horizon, as well as interest rates continuing to climb, retail and logistics businesses will look for efficiencies across operations and other business areas to buffer these impacts.”

Only 10% of retailers said that they would not be impacted at all.

When asked about the most important lessons they had learnt over the last two years, the most common answers included being more flexible and adaptable to change, being resilient and prepared for the unknown, focusing on customer service and loyalty to continue driving sales and the importance of developing and investing in an online presence. Others also stressed the importance of learning that they cannot always depend on Government support and assistance.