Small businesses in the retail sector, employing 50-60% of South Africa’s workforce and contributing approximately 34% to GDP growth, face significant pressure to navigate challenges and recover swiftly from disruptions. Despite political and economic instability, inflation, and issues like load shedding, crime, and civil unrest, SMEs in the retail sector have shown remarkable agility in adapting to emerging challenges.
According to Xero’s 2023 State of Small Business report, reflecting growth-driven confidence, 74% of SMEs have expanded in the past year. The survey highlights a positive outlook, with more than 95% expecting to survive the next year and nearly 90% projecting survival over the next five years, demonstrating resilience and optimism.
Recognizing the vital role accountants play in supporting small businesses, Xero’s report indicates that 60% of SMEs in the retail sector consider accountants crucial for economic growth. These professionals provide valuable advice, training, and assistance in managing finances, navigating regulations, and leveraging digital tools.
The Resilience of Small Retail Businesses
Investing in technology has become pivotal for small retail businesses, with the pandemic accelerating its adoption. Xero’s research reveals that 74% of businesses acknowledge the increased importance of technology, with 43% using it to reach new customers. Cloud-based technology, embraced by 69%, offers flexibility and efficiency in operations, collaboration, and financial processes.
Adrian Heneke, owner of Billy Now, emphasizes the importance of combining creativity and business for a fashion business to thrive. Investing in technology, such as using Xero, has empowered him with sharper financial insights, allowing a focus on creating beautiful clothing.
In the retail sector, recognizing the significance of people, both in skills and wellbeing, is crucial for business growth. The report indicates that 72% of businesses view their employees as tech-savvy, but 86% invest in training courses to enhance knowledge and tech skills. Despite this, 56% identify marketing as the most significant skills gap, emphasizing the need for increased investment in developing these skills.
Mental health and wellbeing
Mental health and well-being have become a priority for small businesses, with 99% highlighting its importance. Over half (53%) foster well-being through open communication, while 36% offer employee assistance programs, 22% invest in a better office environment, and an additional 22% provide well-being days off.
The need for diversity and inclusion
77% of small business owners prioritize diversity, equity, and inclusion in the workplace, emphasizing their commitment to equality. Additionally, 45% believe that large companies prioritize supplier diversity when engaging with small businesses, particularly in the retail sector.