Retail Alliance’s Retail Pulse survey was conducted between November 1, 2021 and November 11, 2021. The survey received 108 responses from retailers, restaurants, services, and other small businesses, throughout Hampton Roads.
The survey included questions about sales, e-commerce, business confidence, business challenges, minimum wage, staffing, supply chain and inventory, and holiday shopping.
Contact: Kylie Ross Sibert, Retail Alliance | 757-455-9323 | email@example.com
Sales are looking positive in the middle of November, comparing them to quarter 3 numbers. 42% report slight growth and 15% significant growth. This is usually an expected increase but still a welcome result this year considering supply chain, staffing and other challenges being faced.
Compared to the same period last year, sales expectations are strong. The survey shows that 19% of survey respondents expect sales to be 20% or more this holiday period versus the previous year. Overall, 69% believe sales will increase year over year during the holiday season compared to 20% who believe they will not have any growth and another 10% who believe sales will decrease.
31% of businesses responded that they had an e-commerce element to their business.
Online sales make up a fairly small percentage of overall sales with 42% reporting that 1-9% of their sales is from online. Just under a third (32%) state that online sales make up 10-19% of overall sales.
Contrary to national predictions of sizable online growth, local businesses expect only slight (55%) or no growth (32%) during the holiday period. Only 13% believe they will experience significant growth.
Their expectations are lower to what they have been experiencing during the pandemic. Twenty nine percent (29%) had a great deal or a lot of growth in online sales during the pandemic with another 65% showing a little to moderate amount. Only 6% had experienced no growth at all.
Some challenges that many small businesses are facing are common across all businesses, no matter the size. Supply chain is one such challenge, with over three quarters having some level of concern (76%).
Staff recruitment and staff retention were also of concern to 54% and 46% of respondents respectively. Nearly half (46%) the survey respondents said that minimum wage increasing was of concern to them.
Especially of concern to small businesses was having less shoppers and patrons, with 60% showing some level of concern. Financial challenges were also concerning to 59% of survey respondents.
One in 5 (20%) people are extremely confident that their business will improve over the next six months. This is an increase over the last two surveys. 29% of people are very confident, which is a slight improvement over August figures but not as high as April’s survey. Overall, 90% of respondents have some level of confidence that business will improve over the next six months..
Nearly half (49%) state that there is no particular timeframe expected by them for holiday shopping this year. Although many small businesses do not open on Thanksgiving, that weekend has 28% of businesses believing it will be the busiest shopping period. This is to be expected considering this is the weekend of Black Friday, Small Business Saturday, and Cyber Monday, and traditionally has been one of the biggest shopping periods of the year.
People are already out holiday shopping according to respondents, with 65% already seeing people shop earlier this year for the holidays.
Many businesses are offering incentives to shoppers this year to try and get them to start shopping earlier and get their gifts while they can. Fifteen percent (15%) of businesses will offer a buy one, get one (BOGO) incentive and 10% will offer a gift with purchase.
A third (33%) of businesses are not offering any incentives to shop earlier.
In addition, nearly three quarters (72%) of businesses responding to survey indicated that they were not starting any sales or specials earlier this year.
So far this holiday season, over half (53%) have been experiencing shoppers spending more than last year and 28% are seeing shoppers spending the same as last year.
The holidays are usually a time for open houses, holiday parties, customer appreciation events, and more and during the pandemic the majority of businesses could not hold these holiday events in person. This year, 65% of businesses surveyed are returning to in-person events, yet 35% have still not done so.
SUPPLY CHAIN ISSUES
The increase in prices of supplies, salaries, shipping, ingredients, and products has impacted businesses heavily this holiday season. Nearly every person responding to this question stated they are seeing an increase in operational expenses currently.
Eighteen percent (18%) are experiencing an increase of 20+% to their operational expenses. Thirty nine percent (39%) are experiencing an increase of 10-19% and 32% are experiencing an increase of 5-9%.
The difficulty in obtaining the products necessary to run your business is also difficult for 2 in 5 people (40%). Another 7% stated it was very difficult. 43% were on the fence, stating it was neither easy nor difficult.
It’s also been difficult in getting inventory for the shelves this holiday season. The largest segment of businesses say that they have only received a moderate amount of their holiday inventory so far (42%). Only 5% have received all of it and 2% none at all. 35% have received a great deal/a lot.
Some holiday orders not yet received are now being canceled by suppliers (41%) and a further 26% of businesses have canceled some of their holiday orders themselves as they are yet to receive them. No one has canceled all their orders or had all their orders canceled for them by suppliers. On a positive note, a third have received all their inventory (33%).
Interestingly, the number of orders increases throughout the year with 37% taking place in the last quarter closest to the holiday season. This may contribute to the inventory shortages for many.
The majority of inventory is sourced within the US (61%) with a further 23% being sourced locally in Hampton Roads/Virginia. Only 16% source their inventory internationally.
The staffing issue seems to have improved for many businesses in our November survey, with 43% agreeing with the statement that they have enough staff to handle the holiday period. Unfortunately, nearly a quarter (23%) don’t believe they have enough staff to work during the holidays.
Businesses have found that the most effective tool for staff recruitment is referrals (43%) and friends (30%) followed by online recruitment services (25%) such as Indeed, Monster, LinkedIn, etc.
When asked what their reaction would be to further increases in minimum wages in 2022, over a third (37%) stated that they will have to pass on the increased costs to consumers by increasing the prices of products and services. Nearly the same amount (36%) say that it will have no impact on their business. Twenty eight (28%) indicated they will adapt wages.