One in 2 businesses won’t survive beyond 6 months if high costs, low sales persist
Top factors for rising costs are higher logistics.
Almost half of businesses in Singapore revealed that they will not survive beyond six months if costs continue to increase and sales will not recover by the end of this year, a 2022 Shop Small Research for Singapore showed.
The survey, commissioned by American Express to Kantar, showed that amongst top factors for rising costs are higher logistics with 42%, raw materials with 42%, and labour with 37%.
Nearly three in four businesses also expect their annual revenue to recover or exceed pre-pandemic levels. Amongst the reasons behind recovery, 45% was due to online expansion. 44% due to consumer spending, 40% due to increasing customer base, and 40% due to retained cash flow.
On the side of consumers, 57% are seeing that pre-pandemic spending levels will resume or exceed.
Over 65% consumers are also pushing for conservative approach should costs still increase, with Generation X consumers being the most conservative. Almost one in two consumers revealed that they will reduce spending across all categories.
“As pandemic restrictions ease and travel resumes the first half of this year, most businesses are optimistic and expect annual revenue to rise. However, our consumer survey shows that while consumers have resumed pre-pandemic social activity, they are approaching spending conservatively,” Elroy Lim, general manager and vice president of merchant services for American Express, said.
“American Express is bringing our Shop Small movement back for the third year to continue to do our part to reward and encourage everyone to support our local businesses,” he added.
American Express is set to expand its Shop Small offer to over 3,500 locations island wide from over 3,000 last year.
“Card Members will get S$3 back for every S$10 spent at participating businesses, up to five times, from 2 to 31 August 20221. In the last two years, its Card Members have made over 250,000 purchases during the one-month long campaigns,” read the statement.
The survey received insights from 304 businesses with a physical shop and annual revenue of $100m or less. It also included insights from 510 adults.
The consumer survey was conducted from 6 to 26 May 2022 whilst the poll for businesses was from 6 to 13 May 2022.