Whether it’s increasing website traffic, managing social media marketing, or handling logistics, it’s clear that retail businesses today have a lot to deal with. All this needs to be managed well to ensure the smooth running of their company operations and grow their business.

While there are smaller issues retailers can afford to put on the back burner, others may have a bigger impact on business and require urgent attention. So then, what are the main challenges facing retail today?

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Retail industry challenges: top five

According to recent research, the escalating cost of inflation tops the list of retail industry challenges brands face. As of the fourth quarter of 2023, over half (53%) of small businesses acknowledge grappling with this pressing issue.

Following closely, revenue shortfall ranks as the second most prevalent challenge, with more than one-fifth (22%) of small businesses expressing concern. The widespread impact of rising inflation exacerbates this challenge across the business landscape. This is followed by rising interest rates, an issue that’s faced by 19% of small businesses.

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Rounding out the five biggest retail challenges are supply chain issues and being able to afford employee benefits or healthcare, named by 17% of small businesses as an existing issue.

Top retail industry challenges: sixth- to 10th

Employee retention and fostering the morale and well-being of existing workers also rank among the top challenges in the retail industry. Approximately 12% of retailers identify these concerns as ongoing issues they are actively addressing. Following closely behind, obtaining access to credit or loans, a matter related to the impact of rising interest rates, is cited by 11% of retailers.

The ninth- and 10th-largest retail industry challenges are a lack of applicants to fill job openings and being able to care for family while attending to daily business operations, which 9% and 6% of brands identify as issues, respectively. 

Indeed, over half of businesses encountering challenges in hiring new talent cite difficulty in finding candidates possessing the requisite skills and experience. Consequently, 41% of businesses aim to implement incentives encouraging current employees to refer potential candidates for job vacancies, while an additional 30% plan to provide benefits such as reimbursement for ongoing education.

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