Knowledge Centre

Introduction

So you've decided you want to start a retail-based business. Maybe you want to turn a passion, say, for clothes or food, into a living. Or perhaps you've been working in someone else's shop for a while and feel the time is right to go it alone. Whatever the reason and whatever the business, this guide will take you through the issues you need to consider and give you practical pointers on getting started.

Sector trends

Although the fortunes of individual sectors have varied in recent years, in general terms the retail sector has seen the following developments;

• the increasing dominance of the multiple chains. This is occurring in many different sectors and threatens the independent
• customers demanding good value for money
• pressure on prices as a result of competition
• major retailers holding regular sales periods
• consumers' expenditure increasing on leisure-related goods and services - due in part to the stable economic conditions for much of the 2000s
• a slowdown in the economy that began in 2008 which has affected spending on the High Street
the temporary VAT rate cut to 15% in 2009 and the increase to 20% from January 2011
• major retailers holding regular sales periods
• the high standards being set by the major retailers influencing the standards found in the independent
• internet retailing becoming more widespread - the value of online retail sales has increased significantly in recent years
• opening hours becoming longer
• increased regulation of many sectors
• a general move to out-of-town retail parks within certain retail sectors
• the emergence of ethical and environmentally minded consumers who are concerned about the effect their purchases have on the environment

Although there is still a demand for well-run independent businesses, particularly if they offer 'niche' goods or services, they still face keen competition. In many sectors they are also faced with the considerable cost of complying with legislation.

You will have to decide whether:

• demand will be high enough in your area to support your proposed business. If you plan to locate in a rural area, there simply may not be enough customers unless you are confident you can attract them from further afield
• your local economy is healthy enough to support your business - if your area has been unlucky enough to suffer from many business failures and factory closures recently your customer base is not likely to have much disposable income
• you will be able to compete against any other similar businesses in your area

1.1 Keep up to date with developments

Joining a trade association is an excellent way of staying up to date with developments in your trade. The retail industry is well represented by different trade associations and professional bodies, many of which produce specialist journals containing material of interest to those operating in that sector:

• the British Shops and Stores Association represents the interests of retail businesses in the non-food sector
• the Institute of Grocery Distribution produces many publications of interest to those operating in the grocery sector
• the Federation of Small Businesses represents the interests of all small enterprises in the UK and offers a variety of member benefits. It produces First Voice, a journal that helps business people to keep up with issues that affect them
• The British Retail Consortium (BRC) is the leading trade association for the retail industry in the UK. It represents retailers of all sizes that sell a wide range of different products. It also publishes The Retailer magazine six times a year

You will be able to obtain a lot of useful information if you go to a trade show or exhibition for your type of business. Visit www.exhibitions.co.uk to access details of shows that may interest to you.