Legislation and SME retailers – compliance costs and consequences

Schmidt, Ruth A., Bennison, David J., Bainbridge, Stephen and Hallsworth, Alan (2007) Legislation and SME retailers – compliance costs and consequences. International journal of retail & distribution management, 35 (4). pp. 256-270. ISSN 0959-0552

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Abstract

Purpose – The introduction, implementation and enforcement of new laws governing the conduct of business can result in substantial additional costs to retailers. Focusing on small to medium sized (SME) retailers in rural areas and market towns, the study reported here aims to provide an understanding of perceptions of potentially disproportionate implementation costs and the resulting consequences. Design/methodology/approach – A three-stage design was used. An exploratory focus group with representatives of the Rural Shop Alliance was followed by seven semi-structured depth-interviews with SME retail representatives. Thematic analysis of the qualitative findings formed the basis for a survey of SME retailers in five market towns. Findings – Findings show SME retailers' perceptions of the differential burden related to the impact of new legislation, with the key factors of direct cost, time costs and information costs. Consequently, business growth and the formalisation of staffing arrangements, in particular, can be obstructed. Generally, good relationships with Trading Standards and Environmental Health Officers are often driven by a need for reactive compliance rather than offering a proactive information and support mechanism. Practical implications – Findings clarify the nature of the differential burden of legislation to retail SMEs. The need for an “outcomes-for-business” driven proactive stance by local delivery agencies is highlighted. Ongoing support visits, telephone help lines and leaflets and the press rather than the internet are identified as key information sources. Originality/value – Both qualitative and quantitative evidence is brought together in the assessment of an area of concern to retail SMEs.