Half of the UK's small businesses fear they will be forced to slash prices before Christmas because of the downturn in consumer spending.
A poll of 250 SME owners found 45 per cent have surplus goods they're desperate to offload.
And 59 per cent in this situation admit there’ll be 'dangerous' ramifications for their business if they fail to sell off excess stock.
In addition to slashing the prices of products, small retailers are likely to resort to offering freebies with other purchases, bundling products together, and even give away unwanted items.
But while this is major concern for UK enterprises, major price cuts will likely to be music to the ears of consumers in the wake of the ongoing cost-of-living crisis.
Further research of 2,000 adults who celebrate Christmas – also commissioned by Inventory Planner – found 41 per cent are ‘depending’ on businesses to discount goods ahead of the festive period.
A spokesperson for the inventory forecasting and planning software for businesses said: "Having excess stock is a problem because products start to decrease in value after a while.
“Among other things goods can start to deteriorate and perish – go out of fashion, become redundant and more.
“Excess stock also means businesses have less room to fill their warehouses with new stock – goods which might be in demand.”
SMEs are still affected by pandemic-panic
The study also found business owners with excess stock estimate their surplus to make up 19 per cent of their overall stock holdings – with the value of this at almost £66,000.
Understandably, 59 per cent are concerned about the ramifications of this on their firm’s cash flow.
As such, 45 per cent fear they’ll be left with no choice but to liquidate much of their superfluous goods.
Part of the reason for this worryingly common plight for small businesses is how difficult it is for owners to predict customer demand and sales in what’s described as a fluctuating market.
Of those with excess stock, 70 per cent admitted it’s practically impossible for them to know how much stock they’ll need in the coming months.
This uncertainty is likely to have caused in part by unsuccessfully attempting to forecast demand during the pandemic.
With 62 per cent admitting pandemic-inflated online demand was a major factor behind purchasing excess stock in the first place.
However, 41 per cent of all business owners polled intend to take steps to fix inventory planning issues ahead of the holiday season.
Such measures include trying new product lines, internal processes such as more stock checks, and ordering less stock.
While the study carried out through OnePoll found 17 per cent are looking to investment in technology systems to help optimise stock replenishment and planning.
A spokesperson for Inventory Planner added: “Keeping track of stock – knowing when to replenish goods and when not to, can prove to be very complex.
“And this process is only made harder by what’s been happening in recent years – whether that’s the pandemic or the cost-of-living crisis.”
