Distribution and wholesale
Funding and operational issues are traditionally the greatest concerns for private businesses in the distribution and wholesale sector, due to its focus on capital and logistics.
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This pattern was reflected in the survey results in this edition of the PwC Private Business Barometer. |  |
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Business growthMixed results across different statesAs a whole, the distribution and wholesale sector experienced above average sales and profits growth. However, fortunes varied considerably across the states and territories. Sales growth was very strong in Victoria but below average everywhere else. Victorian businesses also experienced exceptional profit growth, but there were considerable profit reductions in Western Australia and South Australia. | |
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Growth forecasts close to the averageProfit and sales growth targets were close to the all-industry average for both the short and medium terms. Distributors and wholesalers in Western Australia forecast a sharp return to profitability in the next 12 months. Victorian-based distribution and wholesale businesses had optimistic medium-term targets of 20 per cent sales and 25 per cent profit growth. | |
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New product development the number-one growth strategyTo achieve their growth targets, two thirds of businesses (66 per cent) in the distribution and wholesale sector are considering expansion into new product markets over the next three years. Distribution and wholesale companies across the country are more focused on new product development than on organic growth (52 per cent nominated this as a potential growth strategy for the short term, and 49 per cent for the medium term). More than half (60 per cent) of Western Australian distribution and wholesale businesses said they anticipated expanding their geographic footprint within Australia in the coming year. | ||
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PeopleWanted: distribution and wholesale staffMore than half (58 per cent) of business owners and managers in the distribution and wholesale sector intend to hire staff in the next six months. This result was just below the all-industry average of 59 per cent. Hiring intentions were strongest in Victoria (where 68 per cent of firms expected to recruit new staff) and lowest in South Australia (where 38 per cent were looking for staff). | |
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No major stumbling blocks to hiringThe major impediment to hiring staff was a lack of skilled candidates (32 per cent said this was a problem) but this was a much lower level of concern than in other industries. In fact, distribution and wholesale was the only industry to place people issues last on its list of major challenges (see Table 8). A comparatively high 40 per cent of distribution and wholesale businesses in Western Australia and 38 per cent in South Australia said they were not currently hiring staff. | |
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FundingInternal funding still a popular optionOne-third (34 per cent) of businesses in this sector said they were planning to make a major investment in the next year. This figure was slightly higher for New South Wales (37 per cent) and lower for Victoria (29 per cent). This figure was slightly on the low side compared to other industries. Bank loans were the most popular choice of funding for major investments, nominated by 22 per cent of respondents, followed by internally generated funding at 12 per cent. In New South Wales, 18 per cent of respondents nominated bank funding and 16 per cent said they would use internally generated funds. By contrast, 25 per cent of Victorian businesses said they would seek bank funding and only five per cent said internal funding was an option they would pursue. | ||
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Business operationsMoney issues a greater concern than people problemsFunding business operations is the biggest challenge facing private businesses in the distribution and wholesale sector. Overall, 69 per cent of businesses reported funding issues as their biggest challenge, followed by growth (58 per cent) and business operations (55 per cent). This was the only industry to place people issues in last place, nominated as a challenge by less than half (48 per cent) of respondents. | |
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