More Small Retail Businesses Report Inflationary Pressures

According to the latest Small Business Research Board (SBRB) study released here today, 64% of small retail businesses are experiencing inflationary pressures and 43% expect the economy to worsen oven the next 12 months as compared to the previous quarter.

Of the owners and managers responding to the nationwide quarterly SBRB poll co-sponsored by International Profit Associates, 70% said they have raised prices to offset costs, 26% have added or increased shipping/handling costs, 20% have reduced other operating costs and 18% have renegotiated customer pricing agreements.

Meanwhile, the quarterly report said 29% of survey respondents believed the general economy would improve during the next 12 months, an 11 point drop from the 40% who expressed their anticipation for an improved economy in the first quarter of 2008. 42% said they expected revenue increases of 10% or more during the coming 12 months. This is 16 points lower than the 58% who said they expected higher revenues when polled during the first quarter of 2008.

The Small Business Research Board currently reports that its Retail Industry Small Business Confidence Index (R-SBCI) is set at 31.66. During the first quarter of 2008 it was set at 43.66, and was the third time the SBRB issued an SBCI for the retail industry. The outlook for the general economy, revenue growth and hiring expectations are the three key indicators used to determine the SBCI.

The overall SBCI, during the second quarter of 2008, for all U.S. small businesses was 30. This represents a new historical low and a decrease of 13.67 points from the prior period. The historical SBRB SBCI high occurred during the first quarter of 2005 when the SBCI hit 52 points. The previous historical low was during the fourth quarter of 2007 when the SBCI fell to 33.67 points.

More than 1,000 small business owners participated in the nationwide poll.

The universe of participants is developed from among small businesses across the United States. The SBRB study is a voluntary survey conducted quarterly.

The Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations. The SBRB conducts these studies for the benefit of small business owners and managers. The SBRB also provides opportunities for third parties to gain real time insight into the attitudes of small businesses nationwide through the independently conducted research.

More information can be found at www.ipasbrb.com.

International Profit Associates, Inc. (IPA) is the largest privately held provider of management consulting services to small and medium-size businesses in North America. IPA, and its more than 1,800 professionals, offers a wide range of proven and innovative methodologies to help businesses grow and prosper regardless of the economic cycle. IPA either provides directly, or through its affiliated companies, a comprehensive array of business advisory services, tax and estate planning services or merger, acquisition and other financial advisory services in the United States and Canada. More information about IPA can be found at www.ipa-iba.com.