Whilst it's always better to try and look on the positive side of things, and all of us at Hauticulture certainly are an optimistic bunch. It's impossible to ignore or sugar coat the devastating impact the current economic situation is continuing to have on the small independent businesses up and down the UK. Most startlingly or all, the Federation of Small Businesses UK are now declaring that 40 percent of members will expect to see their revenues decrease over at least the next financial quarter, (October 2022), especially businesses deemed 'non-essential', which could see more dramatic revenue downfalls, and over a longer period.
Additionally, rising energy and material costs are further squeezing the already struggling small businesses, with nine out of ten firms complaining about the increasing burden the cost of living and energy crisis is having on the day to day running of their firms.
Understandably, as prices continue to soar for consumers - and with many struggling to pay for basic essentials, such as food and energy - coupled with the long term stagnation of wages - consumers are being further pressed to think carefully about how they spend each pound of their household income. All this in mind, it becomes clear to see that the economies need for growth is impossible to generate under these existing conditions. This is where small businesses, both existing and start up, are facing some very difficult choices, namely, is it the right decision to open or continue to maintain a physical retail premises?
Firstly, a business must ask itself whether the value of a passing footfall outweighs the costs which holding a retail unit incurs i.e. energy, heating, staffing, marketing, etc. Also, a business must establish whether there is a need for consumers to 'visit' their business, this can prove on of the hardest aspects to assess in any given business. Examples of businesses where it has been difficult to make that distinction include clothing shops - for example, whilst some businesses such as local Northumbrian based business, Roam North - Summit Crazy, have a successful clothing business which they have build through a predominately online presence. Other businesses such as, Whitley Bay based, The Pineapple Room, have established a loyal following of clients who prefer the personal touch in a physical store.
Getting the balance right in the debate between a retail space and a workshop space is crucial for a small business in general, but it has never been of more importance going into 2023 with so much uncertainty abounding in UK's retail sector. However, in the floristry sector, the retail vs workshop space has always been a controversial issue, with some long term florists holding tight to the idea that only a physical bricks and mortar premises qualifies you as a true florist.
Whilst the 2020 Covid pandemic has already seen a huge surge in workshop, studio or home-based florists - the result of the devastating economic consequences UK and global lockdowns on the industry; with weddings and events cancelled, as well as the limited availability of floral supplies entering the country as the global economy seemingly came to a standstill overnight.
Now, small independent florists facing ever increasing rent and/or mortgage costs, material costs, energy costs, staffing costs, marketing costs and of course, all these increased overheads are surging at a time when the majority of florists are seeing revenues shrink, (-7.5% average, IBSIS world, 2022), as consumers tackle to reduce unnecessary costs. Even the weddings and events sector are noticing a decline in bookings and sales, as wary consumers start to reconsider getting married or holding an event, instead opting to see what happens with the economic situation, and shelving or postponing their ceremonies.
By comparison, some small independent florists that have managed to continue to flourish online are making the bold decision to open retail units within the current financial year, (2022-2023). However, the existing retail market would strongly suggest that being studio and workshop based, i.e. selling through online and at pop up events, may be the more advantageous option right now. This will not only significantly reduce overhead costs, but it also forms a more stable premises situation given the vast amount of uncertainty as to how sales over the festive period - usually the most profitable period for any retailer - will translate into sales.
In summary, whilst under 'normal' economic conditions, it would always be encouraged that small independent retailers have a 'shopable' premise, essentially offering a store front for potential customers. The vastly unpredictable situation which exists within the UK right now would strongly suggest businesses - especially small independent businesses - should hold off securing a bricks and mortar shop front if possible - and even go as far as to consider scaling back temporarily - until the UK economy becomes somewhat more predicable with a greater amount of stability.