Four in five (86%) small and medium-sized enterprises (SMEs) in the Scottish retail sector believe the viability of their business is at risk over the next 12 months, according to new research from law firm Aberdein Considine.
The survey, carried out by Censuswide, highlights the mounting economic pressures and uncertain market conditions faced by small to medium businesses in key sectors across the country, including the retail industry.
Respondents pointed to several factors that present financial challenges, including increased costs, supply chain disruption, access to finance and uncertainty arising from policy and regulatory changes, with the findings indicating that these challenges are being felt by businesses of varying sizes within the SME category.
The findings suggest that a broad cross-section of Scotland’s SME community is currently operating in an environment they view as unstable or unpredictable over the coming year.
The pressure from policy and taxation was problematic for many, with nearly a third (31%) of retail businesses surveyed listing Scottish Government policy changes as the biggest challenge to business growth.
Respondents reported that ongoing policy shifts have created difficulties in planning and investment, suggesting a widespread concern among firms about the impact of regulatory uncertainty on their ability to grow and operate effectively in the current environment.
Supply chain disruptions were noted by almost a quarter (24%) of retail SMEs as one of the biggest financial challenges to their operations.
In addition to this, 63% of SMEs in the retail sector felt that they were feeling the impact of Brexit on their staff retention, with close to half (44%) now prioritising growth in their workforce.
Chris Richardson, Partner and Retail Sector Lead at Aberdein Considine, said: “Our survey findings underline the continued strain facing Scotland’s retail sector, with 86% of SMEs expressing concern about their viability over the next year. Regulatory uncertainty, particularly around policy and taxation, is creating real difficulties for businesses trying to plan and invest for the future, with a third identifying government policy changes as the biggest barrier to their growth, in addition to supply chain disruptions also causing strain.
“Yet, despite these pressures, nearly half of the sector is prioritising workforce growth – a clear sign of its resilience and readiness to adapt. With targeted support and a more stable policy environment, Scotland’s retail sector has the potential to emerge stronger and even more resilient.”
