Many SMEs affected by the rising living costs have said this time has been the ‘toughest winter in memory’

Nearly nine in 10 retail businesses affected by the rising cost of living say this has been the ‘toughest winter in memory’ – with record energy costs, expensive raw materials, and reduced customer spending taking their toll.

A poll of 750 retailers with a high-street presence revealed 65 per cent have found it harder to run their business compared to recent years, with 87 per cent of these saying the winter months have been the most challenging.

The most common negative impacts reported are rising energy costs (61 per cent), followed by higher material costs (47 per cent) and customers spending less (41 per cent).

While many are battling with fuel costs (39 per cent) and having to increase staff wages (36 per cent).

Over the winter, eight in 10 experienced an increase in their operating costs, which leapt by an average of 18 per cent.

And 60 per cent reported that their cashflow has been negatively affected by the rising cost of living, leaving 41 per cent having to dip into their company savings to tide them over.

More than a quarter (29 per cent) had decided to borrow money from a bank, and 28 per cent had to use their personal savings to get by.

But despite all of this, keeping prices as low as possible is a priority for hairdresser Jacqui Doherty, who runs The Village Salon in Middlesex.

She has taken the decision not to increase her prices, despite dealing with rising rent, utilities and stock costs over the last 12 months.

SMEs can still thrive

The research, commissioned by Santander UK, also found that despite so many retail businesses experiencing a raft of challenges, almost a quarter (24 per cent) are optimistic about their business’ outlook for the rest of 2023.