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The Business Magazine July 2024
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Falling consumer spending a top concern for Midlands businesses

The Business Magazine article image for: Falling consumer spending a top concern for Midlands businesses
Coventry at night
9 January 2024
Coventry at night

A fall in consumer numbers and spending remains a top concern for Midlands businesses, as companies brace themselves for a challenging first quarter of 2024, according to accountancy and business advisory firm, BDO.

BDO LLP’s latest bi-monthly Economic Engine survey of 500 mid-market businesses, revealed that 44 per cent of regional businesses rank dwindling customer numbers and a reduction in spending as one of the biggest challenges facing their business over the next six months, as inflation and the high cost of living continue to hit customer pockets. The regional trend is also mirrored in the retail sector, with more than a third of retailers placing this as their number one concern. 

It follows the latest BDO High Street Tracker that shows total like-for-like retail sales were negative in the last three months of 2023, the so-called ‘Golden Quarter’, pulled down by poor store and non-store fashion sales, as customers held back on their discretionary spend. 

The survey of mid-sized businesses also showed that supply chain pressure, exacerbated by geopolitical events and staff and skills shortages, is still proving to be a thorn in the side of Midlands businesses, with more than half of regional companies (54%) admitting it will be their biggest challenge in the first half of 2024. A quarter (25%) ranked difficulty accessing capital, such as bank loans and venture capital, as one of their top concerns.

Kyla Bellingall, regional managing partner of BDO in the Midlands, said: “There are a number of enduring themes that continue to blight Midlands businesses, centring predominantly reduced customer spending, supply chains, and the cost of doing business. 

“While these will remain a cause for concern in the coming months, in the longer-term it is the crippling costs of borrowing that will significantly hamper growth. Unsurprisingly, high monthly loan repayments are proving to be a significant concern for Midlands businesses, with many calling on the Government for greater support. 

“The Government should ensure it focuses on regulatory changes to tackle difficulty accessing capital, as well as providing greater financial incentives that are specifically targeted at mid-sized businesses, whose growth will play a key role in the overall economic recovery of the UK.”

Despite the ongoing pressures facing Midlands businesses, almost all (84 per cent) of regional companies said they had achieved forecasted growth in 2023. When asked what steps they intended to take to help drive growth in 2024, more than a quarter (28 per cent) of regional businesses said they plan to reduce the physical footprint of their business, with 26 per cent intending to seek new funding to refinance or pay down debt. A quarter have set their sights on investing in retraining or reskilling employees.   

Kyla added: “While the outlook is beginning to improve, with inflation heading in the right direction, there is still a huge amount of uncertainty on the horizon. 2024 will throw up its own challenges, in the form of potential political change and more economic volatility. As such, businesses in the region must clearly define their priorities in the coming months, while continuing to address ongoing challenges.”


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Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe.

After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts.

She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.

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