Expectations Plummet In Retail And Hospitality

Business Expectations Plummet In Retail And Hospitality Sector – Myob Business Monitor

The number of retail and hospitality sector business owners expecting more work in the next three months has fallen by 20% since November 2009 – down from 42% of all business owners in the industry to just 22%, according to the April MYOB Business Monitor released today.

The MYOB Business Monitor is a nationwide survey of over 1,000 New Zealand business owners, across a range of small and medium businesses, from sole traders to mid-sized companies, and representing the major industry sectors. The MYOB Business Monitor is designed to research key areas of business performance, including profitability, cash flow and pipeline work, as well as business confidence.

MYOB New Zealand general manager Julian Smith says the marked drop-off in ‘pipeline’ work reflects the seasonal changes in the sector.

“Pre-Christmas, expectations for more work were strong in retail and hospitality,” says Julian Smith.

“However, following a slower than expected Christmas for many, and the fall in revenue many businesses are reporting over the whole financial year, this MYOB Monitor shows something of a reality check for the sector.”

According to the MYOB Business Monitor, 35% of retail and hospitality business owners across the country report a fall in revenue over the last 12 months, compared to 28% reporting a revenue gain. Of retail and hospitality sector businesses reporting a decline in revenues, nearly half saw their income fall by 20 – 29%.

“The results of the latest Monitor have also shown a marked drop in the number of retail and hospitality business owners expecting the economy to improve within the next year,” says Julian Smith.

“Confidence in the recovery has fallen 12% for the retail and hospitality sector since November 2009 – down from nearly two thirds of all business owners (61%) to under half at 49%.”

The sector also recorded a larger fall in employment compared to most of the other sectors surveyed in the Monitor. 15% of business owners needed to reduce their staff numbers over the last year, compared to a national average of 11%.

“However, there is still positivity in the market,” says Julian Smith. “Even though they don’t have too much confidence in the market bouncing back quickly, business owners in the retail and hospitality sector are expecting increased profits over the next year.”

39% of retail and hospitality business owners are expecting their revenue to be up in 12 months compared to where they are at the present time.

“The picture this latest MYOB Business Monitor is painting is one of more cautious optimism among Kiwi businesses,” says Julian Smith.

“Many businesses are still working through the effects of the recession and seeing a longer road to recovery than perhaps they were pre-Christmas.”

“To work through this period, where businesses can still be at risk, we’re encouraging our 150,000 Kiwi business customers to keep focussing on the basics and using the tools available to keep close control over every aspect of their operation.”

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