Consumer spending a top concern for Thames Valley

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

BDO LLP’s latest bi-monthly Economic Engine survey of 500 mid-market businesses, revealed that 44% 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.

The regional trend is also mirrored in the retail sector, with more than a third (37%) of retailers placing this as their number one concern.

It follows the latest BDO High Street Tracker that shows like-forlike retail sales were negative in the last three months of 2023, pulled down by poor fashion sales.

The survey of mid-sized businesses also shows supply chain pressure, exacerbated by geopolitical events and staff and skills shortages, is still proving to be a thorn in the side, with nearly three-quarters of regional companies (67%) admitting it will be their biggest challenge in the first half of 2024.

More than a third (36%) ranked raising costs as a top concern.

David Brookes, regional managing partner of BDO, said: “There are a number of enduring themes that continue to blight Thames Valley businesses, centring around reduced customer spending, supply chains, and costs.

“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.

“High monthly loan repayments are proving to be a concern for Thames Valley businesses, with many calling on the Government for greater support.”

Despite the ongoing pressures facing Thames Valley businesses, almost all (97%) of regional companies said they had achieved forecast growth in 2023.

When asked what steps they intended to take to help drive growth in 2024, a third (33%) of regional businesses said they plan to launch new products or services, with a further 33% intending to invest in environmental, social, or governance measures.

More than a quarter (28%) have set their sights on investing in new efficiencies.

Brookes added: “While the outlook is beginning to improve, with inflation heading in the right direction, there is still uncertainty on the horizon.”