The number of SMEs joining the retail sector keeps on growing, despite economic uncertainty and the overhanging problem of Brexit.
GS1 UK, the standards body which licenses barcodes in Britain, says that 84pc of its new members are SMEs compared with 78pc in 2017 — a useful barometer of the number SMEs getting involved in retail.
Retail SMEs need to register with GS1 UK if they are labelling products with barcodes to sell on to distributors and supermarkets.
Overall, the percentage of GS1 UK members with turnover of less than £500,00 has risen from 54pc in 2017 to 64pc today.
SMEs now represent the majority of GS1 UK’s 39,000-strong community, with almost a third of its members earn less than £80,000 annually in revenue. GS1 UK’s total membership has grown by 13pc year on year.
New members are sitting within GS1 UK’s historically largest sectors: health, beauty and cosmetics, clothing, food and drink (10 pc of new joiners overall). between them, these four sectors accounted for 41pc of all new joiners. However, one smaller sector clearly ripe for disruption is children and baby products, which posted a 32pc increase in membership year on year.
Retail remains the largest single sector employer in the UK, accounting for a tenth of the total workforce, with annual sales exceeding £358bn.
To counter Brexit gloom, GS1 UK says that the top 10 fastest-growing markets for its members are outside of Europe, with Nigeria and India leading the charge. That said, the EU remains the biggest market.
Supermarkets stocking indie products is a common way to market for SME food and drink manufacturers. Although Tesco, which controls 27pc of the UK market, is the number one choice for indie SME food and drink producers in terms of preferred stockist, Waitrose – which only has a 5pc market share — was third choice behind Sainsbury’s.
Gary Lynch, chief executive officer of GS1 UK, said: “Today’s shoppers have the world at their fingertips when it comes to product choice, and they are increasingly choosing to buy British for the quality, innovation and traceability implications it has. They are also keen to support smaller shops offering local produce wherever possible.
“Our membership data indicates a fertile retail environment for new and young companies. SMEs continue to enter the market and recent new joiners have helped drive growth in some of the smaller, more niche industries.”