Retail and hospitality small to medium sized businesses are growing at a faster pace than other sectors in the SME space, yet with that comes extreme competitive pressure. Of the retail and hospitality SMEs surveyed for the MYOB Business Monitor, 44 percent experienced a jump in revenue in the year to March 2016, compared to the national average of 37 percent.
Competitive activity remains the greatest concern for operators with 34 percent reporting that it has created extreme pressure – up from 28 percent in September.
MYOB New Zealand general manager James Scollay says the retail and hospitality sector has come off the back of a great year, and looks to be gearing up for further growth.
“Following several very challenging years, the sector has continued to grow and consolidate its gains, ” says Scollay.
“Once again, we’re looking at pressure generated from greater competition and some of the other associated flow-on effects of growth, which in themselves are not terrible problems to have– provided business owners and managers are supported by good, solid systems.”
In the next 12 months, nearly half (46 percent) of retailers and hospitality business owners expect to see further rises in revenue, significantly ahead of the SME average (36percent).
More than a third of the retail and hospitality sector plan to increase their employees’ wages and salaries within the next 12 months, with 36 percent indicating a pay rise – well above the national average of 21 percent.
The number of businesses increasing their full-time staff is also above average (10 percent), with 11 percent planning on hiring more full-time employees in the next year and 16 percent looking to buffer their part-time employee numbers (compared to the national SME average of 12 percent).
Over a third are also expecting to increase the products and services they offer (41 percent) and 36 percent are looking to boost their online sales.
Businesses in the sector are also seeing higher sales, with 37 percent reporting more activity in the current quarter than was standard for this time of year.
The ability to increase online sales is likely due to the fact that SMEs in the retail and hospitality industry are one of the most connected when it comes to digital engagement.
Sixty-eight percent of the sector has an online presence, compared to the national average of 56 percent. Of those in the retail and hospitality sector who are online, more than a third (36 percent), have both a social media and business website.
“In the face of stiff competition, both locally and internationally, it is great to see the industry ramping up their online presence,” says Scollay.
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium businesses.