Businesses forced into discounting to compete

Small and medium-sized enterprises are having to rely on sizeable discounts to encourage new trade, research suggests.

The average discount offered by small and medium-sized enterprises (SMEs) in the UK is now 21 per cent – a 5 per cent increase on 2011 figures, according to a study conducted by online printing specialist Flyerzone.

The survey examined more than 5,000 orders by SMEs for promotional flyers over the last year. The discounts analysed show an increase – 16 to 21 per cent – compared to similar data in 2011.  

Focusing on regions, businesses in the North East offer the highest discount (23 per cent) followed closely by those in the North West (22.8 per cent).

One company that has been offering discounts is The Hair Room in Chester. Toni Hazeldine from the company says, ‘Discounting is becoming a common occurrence, especially in the hair and beauty industry. Due to sites like Groupon, customers now expect a discount before walking through the door. However, it has become a great way to drive more business.’

Eliot Bassett of New lead Projects, which offers a gardening service says, ‘We’ve recently launched our venture and it is tough to compete with the established businesses. We have seen an increase in discounts so new entrants have to match them in order to compete.’

Gavin Cockerill, managing director at Flyerzone says of the rising trend, ‘It has been a long and difficult four years for SMEs in the UK and although our economy is stronger, the need for enticing offers and discounts for customers is still there.

‘Competition is fierce especially for smaller businesses so to remain relevant, you have to answer those needs.’

Businesses in the North East offer the highest discounts

See also: Why discounts are not the answer for a small business – what’s gone wrong with discounts and the cutting edge alternatives you should be using instead.

Related Topics

Discounts
Pricing

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