The Home & Gift Association has submitted a report to the Bank of England through the Genesis Initiative, highlighting the key challenges and opportunities facing businesses across the UK home, gift and stationery sectors.
Drawing on member feedback and recent economic intelligence, the report says consumer demand remains present, but businesses are increasingly facing rising costs, squeezed margins and growing cash-flow pressures.
The report aligns with findings from the Bank of England’s Agents’ Summary of Business Conditions – September 2026, which identified a mixed economic outlook, including subdued consumer spending, improving manufactured exports and modest growth in business investment intentions.
According to the Association, many businesses report stable or growing sales but are finding it harder to convert revenue into profit as costs rise across employment, energy, freight, compliance, insurance and trade show participation.
Key challenges highlighted include:
● Rising employer National Insurance contributions and wage costs
● Late payments and extended payment terms affecting SME liquidity
● Increased energy, freight and logistics costs
● Growing compliance and regulatory burdens
● Reduced retailer stockholding and shorter purchasing cycles
● Uncertainty around international trade and manufacturing competitiveness
Members also reported strong opportunities in affordable gifting, home accessories, export growth, digital transformation and business productivity improvements.
Gemma Sault, managing director of the Home & Gift Association, said: “Our message is clear. The sector is not facing a demand crisis. Consumers are still buying, retailers are still looking for innovative products, and businesses remain ambitious. However, rising costs and cash-flow pressures are making it increasingly difficult for many SMEs to invest, recruit and grow.”
Alongside its policy recommendations, the Association has developed a six-month action plan to help members strengthen cash flow, protect margins and identify opportunities ahead of 2027.
The Association will publish the full report on its website and says the plan will provide members with practical guidance on cash flow, stock and inventory management, margin improvement strategies, export recommendations, market intelligence and economic insights.
The report concludes that the sector remains resilient, innovative and optimistic, but requires improved liquidity, proportionate costs and stronger confidence to unlock its full potential.
