Revenue Improving As Recovery Remains A Tussle For Retailers

20 March 2013

Revenue Improving As Recovery Remains A Tussle For Retailers

• 38% of SMEs stated revenue losses over last 12 months
• 29% have more than usual work in this quarter’s pipeline
• 35% expect revenue to increase in next year

The retail and hospitality sector continues to struggle from a sluggish recovery but more work is in the pipeline and revenue expectations are increasing, reveals a new study by New Zealand’s largest business management solutions provider, MYOB.

The March 2013 Business Monitor, a national survey of 1,000+ SMEs commissioned to independent market research firm Colmar Brunton, found that over the last year 38% of retail and hospitality businesses surveyed saw a decline in revenue, while only 29% saw an increase.

However, the expectations for results in the year ahead are much more positive.

MYOB NZ General Manager, Business Division, James Scollay says increased competition and cautious consumers have continued to be key pressures, impacting SMEs’ road to recovery.

“The retail and hospitality sector has continued to bear the brunt of low consumer confidence,” he says. “The mixed bag of results evident in our research suggests many are still facing a challenging environment while others are beginning to see improvements.”

Over the next 12 months 35% of retail and hospitality SMEs expect a revenue rise, compared to only 13% expecting a fall. Short term work is also increasing, with 29% of businesses seeing a fuller pipeline than usual in the February to April period compared to 22% seeing less work.

“The retail and hospitality sector has struggled more than most sectors throughout the recovery, but is optimistic about the prospects for a positive turnaround in 2013,” says Mr Scollay.

As consumers have yet to return to pre-recession spending levels, and more Kiwis are choosing to pay down debt, retailers in the main cities have found the last 12 months a challenge. 38% of Auckland businesses saw a revenue fall, while only 20% saw an increase. Christchurch retailers performed slightly better – although 42% saw a revenue fall, 37% saw an increase.

Rising from second place in the June 2012 survey, the most significant pressure for the sector overall is competitive activity. 76% of SMEs anticipate some level of pressure for this in 2013.

“Like the rest of the country, price margins and profitability and cash flow were top concerns for retailer and hospitality businesses this year,” says Mr Scollay. “Competition is always a reality, but good financial management systems such as accounting software and increased use of cost-effective tools like e-commerce and online marketing can make a real difference to performance.

“As business operators look to make the most of 2013, the end of financial year period is a great time to seek help from their accountant and business advisors to manage challenges. With expert advice, they can regain control over key pressures.”

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About the MYOB Business Monitor
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from sole traders to mid-sized companies, representing the major industry sectors. It has run since 2009, commissioned to independent market research firm Colmar Brunton. This most recent survey ran late January/early February 2013. The Monitor researches business performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the government. The weighting of respondents by both geographical location and sector is based on overall market proportions as established by Statistics New Zealand and is drawn from an independent survey group, which includes both MYOB clients and non-clients.

About MYOB
Established in 1991, MYOB is one of New Zealand’s largest business management software providers. Its 50+ products and services have been employed by over one million businesses in New Zealand and Australia. MYOB serves businesses of all ages, types and sizes, delivering solutions that simplify accounting, payroll, client management, websites and much more. With a network of more than 20,000 accountants and other professional partners, it provides the support and tools that help make business life easier. Today, MYOB is extending its solutions online and delivering innovation through cloud computing, enabling clients to make smarter connections with business partners and customers. Visit myob.co.nz/smarterconnections.

ENDS

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