The fall of the pound has led to more than half of SMEs in the UK anticipating price hikes in the coming year
According to new data from the British Chambers of Commerce (BCC) 54 per cent of small and medium sized businesses plan price hikes, while 44 per cent of SMEs have reported that the weak pound is expected to damage their domestic sales margins.
Export margins produced a more diverse outlook, with 25 per cent expecting export margins to benefit from currency fluctuations, and 22 per cent anticipating it will impact them negatively.
45 per cent of businesses state they do not currently manage currency risk, but 46 per cent added they expect to in the next six months.
“The depreciation of Sterling in recent months has been the main tangible impact that firms have had to grapple with since the EU referendum vote,” BCC director general Dr Adam Marshall stated.
“Our research shows that the falling pound has been a double-edged sword for many UK businesses.
“Nearly as many exporters say the low pound is damaging them as benefiting them. For firms that import, it’s now more expensive, and companies may find themselves locked into contracts with suppliers and unable to be responsive to currency fluctuations.”
Published on Tuesday 07 February by Ben Stevens
What Options Are There?
Margin Optimisation ?
The above article once again drives home the requirement for any business to sharpen their processes, knock down their “Knowledge Silo’s” improve their information flow, and last but not least invest in the required technology to harvest the crucial Data Insight which once understood has to form the basis of the required action plan.
The rise in procurement costs can no longer just be off-set to the consumer. The associated margin enhancement strategy will require some “navel gazing” across the entire operation to ascertain where costs, productivity and other key processes can be improved on a perpetual review bases.
That always say “The proof of the pudding ………..etc” well having recently implemented just this kind of review and delivered the identified action plan on only 60% of the business processes we are proud to have been able to delivered together with a driven team the following LFL improvements;
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Published: John Versteeg, MD Retail-it Consultants Ltd.