The news seems to be full of contradictions: on one hand, inflation is at a record-high after skyrocketing to its highest since May 2009 at 7,4% in June; accompanied by higher prices. On the other, supply chain repair in many sectors is providing surpluses which are starting to cause sweeping discounts at retail level.
Zane van Rooyen, product marketing manager at Skynamo, explains that both of these opposing shifts are happening simultaneously in an unprecedented and never-before-seen way. “Those industry segments that are being hit are being hit hard, whilst others are seeing unplanned growth.”
Referring to the Skynamo Industry Thermometer which benchmarks industry sales activity across 27 sectors, van Rooyen says that for the most part, local small businesses are holding their own against the current pressures.
“Those operating in apparel, beauty and cosmetics, as well as pharmaceuticals recorded sales growth in June this year, which may largely be due to seasonal consumer requirements and the fact that long-awaited items are available again.”
He points out that slowing down has taken place in segments like accessories; automotive; beer, wine and spirits; homeware; and services. “This is to be expected as the first things consumers cut when feeling under pressure are self-care and luxuries.”
However, van Rooyen says that, as a whole, all industry segments monitored by the Thermometer seem to be making steady progress compared to their respective data over the past 30 months. “These results could have better though, but the continued war in Ukraine is affecting world trade channels of vital food as well as fuel supplies. These are considerably the biggest factors causing this recessionary uncertainty and difficulty in forward planning, as there is no telling what the long-term effects of this will be,” he explains.
“It is true that no-one said this year’s recovery after Covid would be easy, but with so many factors currently at play across the globe, there just is no telling how each week is going to present itself.
“Without data-driven insights from solid sales automation and finance software, it is hard to imagine how manufacturers, wholesalers and distributors, who choose to still run their businesses on paper-based, manual processes are surviving. Now is the time for all small businesses to adopt the necessary tech in order to remain ready for anything in light of the ever-changing macro environment,” van Rooyen concludes.