New report finds that 2 out of 3 small businesses have had to raise their prices 3 times or more in the past 5 years – a quarter expect to have to increase prices again before the end of the year.
500 small businesses were approached in a report commissioned by Smart Energy GB.
What's driving the squeeze?
The report found that the 3 top reasons for a business having to increase costs for the consumer were increases in supplier costs, energy bills, and staff wages. However, nearly every small business questioned in the study said that increasing their prices was an absolute last resort, even though outgoings had increased by an average of 17% in just 12 months.
Small businesses are taking necessary steps to try to absorb the increase in their business outgoings. These include reducing their own salary and reducing profit margins.
38% of the businesses asked felt that customers were already struggling with the cost-of-living, and if they were to increase their own product prices further, they were concerned their customers would look elsewhere for a cheaper alternative.
A OnePoll survey found that 84% of people felt it was still important to support local independent businesses. Despite this, customers are still likely to choose the cheapest option on the market during financially testing times, putting pressure that’s unsustainable on small businesses to compete with larger companies.
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