Yorkshire businesses feeling the squeeze as competition hots up
The study of business owners and managers in Leeds, York and North Yorkshire, shows that, despite rising costs, some businesses are under pressure to maintain or decrease prices due to cheaper competitors entering their market, which is adding to the strain on margins.
More than half (52 per cent) of businesses said that competition was more of a concern than it was three months ago as a result of new companies entering the market.
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Hide AdWith the majority of businesses reporting that domestic sales have remained constant (42 per cent) or decreased (22 per cent), there is concern that flat business growth, combined with rising costs, could lead to a period of stagflation.
Mark Goldstone, the head of corporate relations at Leeds, York and North Yorkshire Chamber, said: “Rising costs pose a significant challenge for local businesses.
“Profit margins were squeezed heavily during the recession, and inflation is further adding to this issue.
“Businesses are having to re-evaluate their processes, positioning and supply chains in order to minimise the negative impact of inflation, and there is also a role to be played by the Government in reducing the cost for businesses in terms of red tape.
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Hide Ad“The risk of inflation is further exacerbated by the weak economic recovery as businesses aren’t experiencing robust sales increases to offset the rising costs. Given the dangers facing the economy, we urge the MPC to maintain low interest rates until the recovery is more secure.”