CHAPTER 1: INTRODUCTION

1.1 Background

Small and medium-sized enterprises (SMEs) contribute significantly to the UK’s annual economic output. In 2019, they contributed about 52%, translating to about £2.0 trillion (McGowan, 2019). In 2020, the contribution had risen to about £2.3 trillion (Ward, 2021). The notable economic roles SMEs play in any country include reducing unemployment, fostering innovative ideas, and facilitating the volume of exports (Rotar, Pamić and Bojnec, 2019). In their study, Rotar et al. (2019) discovered a significant correlation between employment in SMEs’ service sector and overall economy employment. In contrast, the association was insignificant for employment in the industry sector. The researchers categorised the wholesale and retail sectors under the service industry. The European Commission (2018) also reported that the whole and retail sector was one of the most dynamic contributors to employment recovery among SMEs in the European Union in 2016. Therefore, SMEs, especially retailers, play a significant economic role in Europe, including the United Kingdom. Yet, much is unknown about their resilience during the Covid-19 pandemic, as elaborated in the problem statement below.

The United Kingdom officially left the European Union on 31 January 2020. A survey of UK SMEs in 2019 indicated that Brexit-related concerns were escalating, especially among import and export-oriented SMEs (Brown, Liñares-Zegarra and Wilson, 2019).  However, at that time, local administrations were better equipped to alleviate any negative consequences likely to emerge from the event (Brown et al., 2019). In agreement with the pre-Brexit survey, a post-Brexit survey revealed that export-oriented SMEs in Scotland were the most affected by the negative consequences of Brexit (Brown, Kalafsky, Mawson and Davies, 2020). Some of the negative consequences included significant reductions in employment, innovation, and volume of exports (Brown et al., 2020). According to Brown, Liiares-Zegarra and Wilson (2018), SME retailers in the UK were the second most concerned about the negative consequences of Brexit concerning their future strategic intentions. Therefore, shortly before the onset of the Covid-19 pandemic, UK retail SMEs were severely affected by the adverse outcomes of Brexit. As such, the negative consequences of the pandemic worsened a situation that was already worse, resulting in far-reaching negative consequences, as elaborated further below.

The onset of the Covid-19 pandemic resulted in severe adverse outcomes in the world economies, both in developing and developed nations. The supply and demand sides of SMEs were severely affected. According to the OECD (2020a), companies experienced a sharp decline in labour supply, as individuals had to comply with curfews and lockdowns and look after children out of school. On the demand side, companies experienced a significant reduction in demand for services and goods, resulting in liquidity shocks that considerably impaired SMEs’ ability to function (OECD, 2020a). A survey conducted in April 2020 by the British Chamber of Commerce (BCC) revealed that 6% of respondents had already run out of cash by the time of the survey, and 57% had only three months reserves in cash. Yet, only 7% received grants, and only 1% had accessed the government’s Coronavirus Business Interruption Loan Scheme (BCC, 2020). OECD (2020a) indicated that SMEs were the most severely affected by the pandemic, probably due to their reduced financial resilience compared to larger firms. Therefore, it can be said that the combined adverse effects of Brexit and the pandemic have had a significant disruption on SME operations, consequently affecting their resilience levels considerably, as further elaborated below.

According to Brown et al. (2020), the resilience of SMEs is an indicator of regional resilience, considering their vast economic contributions. SME resilience determines their ability to recover from hardships, such as economic downturns due to crises (Nikolić et al., 2018). Brexit and the Covid-19 pandemic have been a significant resilience test for SMEs in the UK. According to Filippaios (2019), the unfavourable business environment caused by Brexit was more likely to affect their ability to build resilience. Even government support would not help them develop this ability because resourcefulness and technical and organisational capabilities do not necessarily translate to resilience (Filippaios, 2019). These observations can also be extended to the Covid-19 situation. According to the OECD (2020a), a May 2020 survey of 5471 firms in the United Kingdom revealed that 41% had closed, and 35% reported concerns that they may never open again. This trend existed despite the response policies put in place by the UK government to shield SMEs from the negative impact of the Covid-19 pandemic. Most UK SMEs focused on cost reduction strategies. The resilient ones focused on introducing new products and digital technologies that would further enable them to evade the pandemic successfully (Enterprise Research Centre, 2021). A recent OECD (2021) report indicates that the unprecedented long durations the pandemic has been in existence remains a significant operational dilemma for most firms because even government support, despite its significance, remains conspicuously unstainable in the long term. Therefore, it is imperative to dedicate more scholarly work on SME resilience, such as finding ways firms can develop the ability to build resilience despite the adverse effects of the Covid-19 pandemic.

1.1.1    Retail Sector in the UK

The retail sector continues to play a vital role in UK’s economic prosperity.  For example, in 2011, it contributed about one-fifth of the country’s Gross Domestic Product (GDP) (approximately £303bn) (Oxford Economics and Oxford Institute of Retail Management, 2012). It contributes the most significant portion of employment in the country, whereby in 2011 alone, it employed more than 3 million people in Britain (Oxford Economics and Oxford Institute of Retail Management, 2012). A recent UK Parliament statistical report of the retail sector revealed that the retail industry contributed 5.0% to the UK’s economic output in 2020, a 2.5% fall from 2019 due to the negative impact of the Covid-19 pandemic (Hutton, 2021). Additionally, in a study conducted back in 2005, it was discovered that it was unwise to compare UK’s retail sector to that of other countries because of differences in operational structures and regulatory environments that impose costs that are not necessarily incurred in other countries (Reynolds et al., 2005). Therefore, it is imperative to examine how retailing businesses operate in the UK, the nature of operational and regulatory environments, and the costs incurred in the process.

According to Burt, Sparks and Teller (2010), the norms and manner in which the retail sector in the UK operates differentiate it considerably from its EU counterparts, one of the indicators that the country was unwilling to adopt the EU business policies. In their report, Oxford Economics and Oxford Institute of Retail Management (2012) indicated that the UK retail sector is the largest globally but serving locally, pointing out the British people’s lifestyle norms closely linked to their distinctive national culture. Therefore, before digging deeper into how the UK retail sector is unique from the rest of the world, it is imperative to start by highlighting some of the demographic features of the country and the expenditure behaviour of her people.

The UK retail sector enjoys a distinctive market deeply embedded in the country’s demographics and economic situation. According to World Bank (2020a), the United Kingdom was the fifth largest economy globally in 2020 and the second largest in Europe after Germany. It had a GDP of about £2,000 tr in the same year. In 2020, the World Bank (2020b) estimated that the country had about 67 million people, translating to a GDP per capita of about £30,000. It has the second-highest GDP per capita in Europe after Germany. Also, according to the Office for National Statistics (ONS) (2020a), in the 2019 financial year, the average household weekly spending was £592.00 after adjusting for inflation, an insignificant variation from the financial year ending December 2018. However, a recent ONS (2020b) report indicated that Q3 2020 (July to September) recorded a 10.1% decrease compared to the same period in 2019 due to the negative impact of the Covid-19 pandemic. Most household expenditure goes to food and beverages and retail shopping (ONS, 2020b). Therefore, the considerable reduction in household expenditure during the Covid-19 pandemic must have directly affected retail sales in the United Kingdom. According to ONS (2020c), in April 2020, retail sales decreased by more than 19% from the previous month following the pandemic outbreak and subsequent government restrictions. However, since then, business owners and people had slowly adjusted to the new normal, and by May, the growth was restored to a positive 12% and 13% in May and June, respectively. Since then, a sharp decline was recorded, with around a negative 3% by December 2020 (ONS, 2020c). Overall, despite the harmful effects of the Covid-19 pandemic, the United Kingdom has one of the largest retail markets globally, and the retail sector continues to play a vital role in the country’s economic output.

          1.1.2 Strategic performance among retailing SMEs in the UK

Strategic performance refers to the methodology to improve how an organisation measures and monitors performance for continuous improvement to achieve overall organisational goals (Adler, 2018; Schütz et al., 2020). Therefore, strategic performance management is crucial for organisational success. For example, a business can implement various strategies to promote their resilience, such as during a crisis like the Covid-19 pandemic. Such a business will need to implement a systematic approach to measuring and monitoring the programme’s performance. Based on the findings, managers can eventually recommend areas that need further improvement. According to Zamecnik and Rajnoha (2015), measuring and managing the performance of a business is a complex and challenging process, especially in the contemporary world where both financial and non-financial performance indicators are critical to continuous improvement. Even so, strategic performance management is an inescapable business aspect because company owners and senior managers must develop a holistic understanding of the current position of the business to develop short, medium, and long-term development goals.

When building business resilience, continuous improvement is a central factor to be considered. Resilience building, especially in adversity, entails introducing dynamic capabilities to improve internal capabilities (Hillmann & Guenther, 2020). Identifying the dynamic capabilities needed in a particular business requires the identifying of its performance needs. Therefore, it can be said that business resilience can be improved through strategic performance. According to Duchek (2019), resilience originates from the continuous development of operational and strategic capabilities. In that regard, strategic capabilities include the ability of the senior managers to execute effective strategic performance management. Therefore, it is imperative to investigate how retailing SMEs in the United Kingdom improved their resilience through strategic performance. The study entails examining the relationship between strategic performance and resilience followed by a set of interviews intended to provide more details on what retailing SMEs in the United Kingdom lacked during the pandemic and what can be done to improve their strategic performance as a strategic approach towards building resilience amid a disruptive event like the Covid-19 pandemic.

Due to the role of strategic performance in promoting business resilience, the construct has also been associated with improved organisational performance. In their Canadian study of public organisations, Pollanen et al. (2016) discovered that efficient and effective strategic performance positively impacted the overall financial and non-financial performance. In their study of more than 700 SMEs, Majid et al. (2020) discovered a mean of 3.8 in a five-point Likert scale, which indicates that most of the surveyed SMEs had moderately high levels of strategic performance. However, the study was carried out before the onset of the Covid-19 pandemic. Currently, no study has examined the strategic performance of SMEs during the Covid-19 pandemic, including in the United Kingdom. Besides, the literature on the strategic performance of SMEs, especially in the retailing sector, is generally scarce. Based on prior findings that strategic performance could be contributing to the resilience of SMEs, it is imperative to investigate the various ways in which the construct (strategic performance) can be used to make SMEs more resilience, especially in the new normal.

1.2 Scope of the Study

The scope of the current study revolves around the resilience of SMEs in the retail sector in the United Kingdom. The topic of the study is also restricted to the Covid-19 context, despite that Brexit implications were discussed in the background section. The research will cover the extent to which the Covid-19 pandemic has affected the ability of retail SMEs to build resilience. It will also cover sensemaking strategies that SMEs operating in the UK retail sector can adopt to boost their capacity to escape the Covid-19 hardships. Particularly, the study focuses on how SMEs’ resilience-building capabilities during times of uncertainty like the Covid-19 pandemic can be improved through strategic performance. The findings of the study will have considerable managerial implications for business leaders and managers in this sector. The current study will focus on the fashion retailing SMEs in the United Kingdom, but the findings will be generalisable to SMEs in other sectors of the economy.

1.3 Study Rationale

The rationale of the current study lies in the fact that SMEs need to build resilience to recover from the harmful effects of the Covid-19 pandemic. Within this scope, various reasons informed the current study. First, the well-being of the UK economy depends in part on the performance of SMEs due to their potential high-income generation and contribution to employment (Ward, 2021). Second, SMEs were more severely affected by the Covid-19 pandemic than large businesses due to their reduced resilience (OECD, 2020a). Third, there are fears of economic recession in the United Kingdom and various parts of the world; these perceptions are most vital amongst SME owners (Albonico, Mladenov and Sharma, 2020). Finally, few studies have investigated how the Covid-19 pandemic affected SMEs’ ability to build resilience, mainly since no studies have so far focused on SME retailing in the UK. Finally, no study has so far investigated how SMEs can build their resilience through strategic performance during the Covid-19 pandemic. Therefore, it is imperative to investigate how SME owners and managers can build resilience to promote their ability to recover from the adverse effects of the pandemic in the short and long terms.

1.4 Problem Statement

First, according to Fatoki (2018), one of the critical determinants of SME resilience includes entrepreneurial skills, management, and leadership skills. SME leaders and managers contribute positively to business resilience when they demonstrate spiritual influence, competence and tenacity, instinctual trust and tolerance, and control (Fatoki, 2018). However, a 2015 technical report by the Department for Business Innovation and Skills revealed that most English SMEs’ leadership lack skills and competencies to implement managerial best practices (Hayton, 2015). The study’s findings also revealed that the uneven variation in leadership and management skills across SMEs was also significantly associated with uneven variation in SME performance across various sectors. Although no study has investigated how leadership and management skills influenced the response of SMEs to the Covid-19 pandemic, prior findings within the past five years demonstrate with certainty that most SMEs in the UK must have struggled immensely during the pandemic due to shortfalls in entrepreneurial skills. The lack of skills hindered SMEs from implementing management best practices, explaining why they were the most affected (OECD, 2020a).

Second, the innovative capacity of SMEs is a critical determinant of their resilience (Bushell and Hughes, 2013; Kativhu et al., 2018). Research demonstrated that UK SMEs that received government support were more likely to be innovative and achieved rapid growth than those that did not (Foreman-Peck, 2012). Therefore, it can be argued that government support promotes the innovative potential of SMEs, leading to their increased resilience and ability to recover quickly from adverse economic events, such as the Covid-19 pandemic. A 2019 survey by the Department for Business, Energy, and Industrial Strategy revealed that only 38% of UK businesses, both small and large, were innovative in 2016, which was a sharp decline from the previous year’s 49%. Besides, the survey revealed that more large businesses than SMEs were more likely to be innovative. The same survey discovered that SMEs in the service industry, including retailing, were less likely to be innovative than their counterparts in the construction and production industries (Achur, 2020). Research conducted elsewhere demonstrated that innovative active SMEs during the Covid-19 pandemic were more likely to sustain their business operations than those that did not (Adam and Alarifi, 2021). Therefore, it can be argued that most retailing SMEs in the UK struggled the most during the pandemic because they are generally less innovative compared to their counterparts in the production and construction industries. Besides, few UK SMEs accessed government relief support programmes, implying limited external support to promote their innovative potential (Dimson and Sharma, 2021).

Third, closely related to the idea of innovation is the fact that most brick-and-mortar retail stores were closed either temporarily or permanently to implement the Covid-19 protocols, such as social distancing. According to OECD (2020b), one of the ways governments could have helped retailers, regardless of size, is to facilitate them to go online. Retail customers have also normalised stay-at-home new normal, resulting in a significant drop in demand for brick-and-mortar retail merchandise (Yohn, 2020). Consequently, retailing SMEs are left with no option other than to reimagine their business operations.  It can be challenging for SMEs to go online because they need to integrate their services using an e-commerce approach while ensuring consistency and reliability (Yohn, 2020). The reduced demand for retail services and goods caused a liquidity shock to most SMEs; therefore, sustaining online operations for the first time can be highly challenging. However, so far, little is known about the resilience of retailing SMEs that chose the e-commerce path in their response to the Covid-19 pandemic.

Finally, according to Skouloudis et al. (2020), social capability plays a significant role in the resilience of SMEs, meaning it is critical to integrate social parameters into the corporate strategy to develop the ability to respond to the complex and turbulent Covid-19 pandemic. Research has shown that SMEs’ social networks can enhance their profitability through improved financial performance (Li, Ansell and Harrison, 2015). However, little is known about how the Covid-19 pandemic affected SMEs’ social networks and the subsequent impact on their financial performance. A Ph.D. dissertation by Oyedepo (2017) revealed that financial constraints were among the biggest hindrances to UK SMEs’ capacity to build social networks needed for their sustainable development. Therefore, it can also be argued that the liquidity shock caused by the Covid-19 pandemic might have immensely affected retailing SMEs’ social networks needed for their resilience building. Based on these observations, it is imperative to provide in-depth insights into how retailing SMEs can sustain their social networks amid the pandemic to continue building their resilience in the short and long terms.

1.5 Aims and Objectives

The aim of the current study is to survey UK SMEs in the retail sector and quantify the various obstacles that impeded their resilience-building during the Covid-19 pandemic. The study will address the following objectives:

1. To review the literature and synthesise the challenges that faced retail SMEs during the Covid-19 pandemic.
2. To assess the levels of resilience among retail SMEs in the UK.

• To measure the strategic performance of SMEs in the UK.

1. To investigate how SMEs can build their resilience through strategic performance during the Covid-19 pandemic.

1.6 Research Question

The current study will address the following research question: “Is there a statistically significant association between SMEs’ resilience and their strategic performance?”

1.7 Significance of the Study

First, the current study will develop a set of criteria that can be used by retailing SMEs in the United Kingdom to build resilience through strategic performance amid the negative consequences of the Covid-19 pandemic. The criteria will touch on various elements that influence the resilience levels of businesses, such as leadership and management skills, innovative capacity, and social networking. Second, the current study’s findings will provide in-depth insights into the identified problems and their possible solutions, enhancing the UK government’s response strategies towards supporting retailing SMEs during the Covid-19 pandemic. Above all, the current study’s findings will lay a strong foundation for future research focusing on SMEs’ resilience-building amid pandemics and economic crises, such as Covid-19.

1.8 Structure of the Dissertation

The dissertation is organised into five sections. The first chapter provides background information to the topic, justifies the current study, presents the problem statement, aims, objectives, and research questions, and outlines how significant the study’s findings will be. The second chapter is a comprehensive review of the literature intended to identify research gaps and present the theoretical framework that guides how the study was undertaken. The third chapter outlines the methodological approaches of the study, such as approaches to theory development, the research design, data collection and analysis techniques, and ethical considerations. The fourth chapter outlines the results of the study, whereas the fifth chapter discusses them. The final chapter provides conclusive remarks and recommendations for practice and future research.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER 2: LITERATURE REVIEW

2.1 Introduction

This chapter presents a comprehensive review of the literature, directly addressing the research objectives stated in Chapter 1. The first sub-section of the literature review covers the various challenges that faced retailing SMEs in the United Kingdom and other parts of Europe. The second sub-section reviews the literature on the resilience levels of the retail sector overall. Afterward, resilience levels of retailing SMEs are also emphasised. Finally, literature on the various ways retailing SMEs can enhance their resilience during a crisis like the Covid-19 pandemic is discussed. The literature review aims to identify knowledge gaps and eventually address them in the actual study. additionally, articles and other scholarly sources retrieved under each subtopic were grouped based on their topic similarities. Grouped articles were compared and contrasted to identify research progress on that topic and eventually determine what needs to be covered in future research to further elucidate how to promote retailing SMEs’ resilience during a challenging time like the Covid-19 pandemic.

2.2 Challenges Facing Retailing SMEs During Covid-19 Pandemic

The thematic analysis of the various articles retrieved under this subtopic revealed that retailing SMEs faced the following categories of challenges:

1. Sick employees
2. Merchandise distribution challenges
3. Supply chain challenges
4. Compulsory shut down
5. A significant deviation in typical consumer behaviour
6. Considerable drop in demand for goods due to adverse economic situations

It was identified that these factors influenced the productivity of not only retailing SMEs but also large companies operating in the retail sector in Europe and other parts of the world. Each of these categories is discussed below.

          2.2.1 Sick employees

Big, medium and small-sized SMEs in the retail sector experienced unprecedented disruptions resulting from the necessary quarantine of their employees. According to a KPMG Insights article, Qian, Vader, and Martin (2020) reported that they talked with some business owners in the retail sector in pursuit of helping them develop resilience to overcome the short-term shocks of the pandemic while considering its long-term implications. One of the major concerns by brick-and-mortar retailers whose employees could not work remotely was the quarantine of their staff. Although the researchers did not focus on the SME in particular, they did indicate that some physical retail stores were completely shut down due to this problem. In contrast, others like the grocery stores experienced spiking demand for their products, forcing them to hire idle restaurant employees following the closure of their businesses (Qian et al., 2020). In agreement with these observations, Ali Sulaiman, Ahmed, and Shabbir (2020) reviewed secondary sources to determine the human resource management implications of the Covid-19 pandemic. The researchers discovered that companies were faced with additional human resource management responsibilities because health policies in various European and North American countries required multiple businesses in the retail sector and many other industries, regardless of size, to provide paid sick leaves to employees under quarantine. Employees that tested positive for the Corona Virus were to be paid for 26 weeks in sick leave. In that regard, SMEs were forced to incur the extra costs because, for their continual operation, they had to temporarily hire employees from others sectors, like idle restaurant employees, as highlighted by Qian et al. (2020). Therefore, most retailing SMEs were forced to shut down their businesses because they could not incur such costs. In their book, Guven, Guven, and Akkaya (2021) added that going online (e-commerce) remained the viable option for most retailing companies. However, as highlighted later, most companies that went online still could not cope with distribution challenges, forcing them to remain wholly shut down. Overall, the Covid-19 pandemic arrived with devastating consequences on retailing SMEs due to sick employees.

However, the studies reviewed under this theme were inherently weak and hence did not estimate the effect size of sick employees on the operations of retailing SMEs. For example, Qian et al. (2020) did not indicate the sample size but only showed to have interacted with retail businesses. Similarly, Ali Sulaiman et al.’s (2020) study was a secondary review of sources. Therefore, it lacked quantitative estimations of the effect of sick employees on retailing SMEs. Finally, Guven et al. (2021) only recommended adopting e-commerce for retailers to survive the pandemic and beyond. However, the researchers failed to account for SMEs that could not cater for distribution challenges that presented along with going online for the first time. Therefore, it can be said that future research must investigate the effect size of sick employees as a result of the pandemic to provide a precise picture of the situation. Currently, general observations have been made that may lack empirical rigour.

          2.2.2 Merchandise distribution challenges

Distribution challenges were defined as obstacles that retailing SMEs experienced while distributing items purchased online to their customers. As discussed in 2.2.1, Guven et al. (2021) indicated that most retailing companies chose e-commerce to build resilience amid lockdowns and curfews. According to Pantano, Pizzi, Scarpi and Dennis (2020), customers probably perceived helpful those retailers that could do home delivery. Therefore, the retailers that could deliver purchased items to their customers’ homes were more likely to lose loyal customers (Pantano et al., 2020). Home deliveries require reorganisation of business structures, coming up with additional costs. Therefore, only big retailers could perform online deliveries during the Covid-19 pandemic (Chang and Meyerhoefer, 2020). Chang and Meyerhoefer (2020) added that online delivery of groceries during the Covid-19 pandemic increased significantly due to an upsurge in customers and demand. As a result, big retail companies benefited from the market. In this regard, while considering the observations of Pantano et al. (2020), it can be said that the increase in customers for big retailers during the pandemic resulted from customers losing their loyalty to SMEs that could not do home delivery. This claim agrees with Koch, Frommeyer and Schewe’s (2020) observations that small retailers who could not develop e-commerce solutions relied on social media sites to advertise their products and services. Koch et al. (2020) further added that while small retailers were taking that path, big retailers took the opportunity to enhance the performance of their e-commerce platforms. Pantano et al. (2020) agreed by arguing that the variety of online products by big retailers increased significantly, surpassing what could be offered in a physical store. In that regard, it can be said that SMEs experienced significant merchandise distribution challenges during the Covid-19 pandemic, resulting in many of them losing their loyal customers to big retailers. However, this claim is to be treated tentatively because the findings were based on general observations. For example, Koch et al. (2020) founded their comments on a news article, and no empirical examination was performed in their actual study. Besides, the observations are to be treated theoretically because none of the three studies highlighted distribution challenges apart from Pantano et al.’s (2020) hypothesis that the Covid-19 pandemic affected how loyal customers perceived retailers. Overall, future research should investigate the extent to which the Covid-19 pandemic affected retailing SMEs’ online distribution of merchandise. In other words, there is a possibility that the negative consequences of the pandemic might have impacted retailing SMEs’ ability to perform home deliveries, which they would have otherwise been able to do without the pandemic.

          2.2.3 Supply chain challenges

Supply chain disruption was one of the most significant negative consequences of the Covid-19 pandemic for any business in any industry. A close look into various studies that examined the Covid-19 pandemic on SMEs revealed that the phrase “supply chain” was the most frequently mentioned in contexts related to business disruption. For example, the International Trade Centre (ITC) (2020) noted the term more than 850 times in a 190-page document examining the impact of the pandemic on SMEs. ITC (2020) reported that the supply chain disruptions resulted from pandemic-induced lockdowns in the United States, the European Union, and China, which are the largest exporters and importers of goods. Since the retail sector directly relies on such supply chains, it was also hit the hardest due to the lockdowns (ITC, 2020). The OECD (2020a) echoed these observations, which reported that 45% of businesses surveyed said to have experienced moderate to severe supply chain disruptions. The situation might have been more difficult in the United Kingdom, based on Garnett, Doherty and Heron’s (2020) claims. Garnett et al. (2020) agreed with the above, indicating that the United Kingdom imports about 84% of its foodstuffs from other European countries. As a result, significant advances had been made in supply chain management before the pandemic. However, such innovations have not accounted for disruptions from exogenous factors, such as the Covid-19 pandemic. Hence, due to the complexity issues, the foodstuff industry immensely suffered since it proved highly challenging to regulate supply chains (Garnett et al., 2020). Since retailing SMEs, especially in the food industry, heavily rely on the efficiency of the international supply chain networks, it can be said with certainty that they also suffered the most.

In agreement with the above conclusion, a survey conducted in the United Kingdom revealed that about 28% of SMEs doubted their ability to sustain their supply chains amid the Covid-19 pandemic (Albonico et al., 2020). In contrast to these observations, Rybaczewska, Sułkowski, and Bilan (2021) noted that independent convenience stores in the United Kingdom remained relatively resistant to pandemic-induced adversities. However, the researchers did indicate that most independent convenience stores in the United Kingdom are direct beneficiaries of the efficiency of international supply chains (Rybaczewska et al., 2021). They also argued that their footfall analysis was only based on data obtained in the short term and that long-term implications of the pandemic were yet to be certainly known (Rybaczewska et al., 2021). In another study conducted in the United States and Canada, it was discovered that convenience stores remained relatively resilient to the adversities of the pandemic because food supply chains performed remarkably well (Hobbs, 2021). In this regard, Hobbs’ (2021) observations agreed with those of Rybaczewska et al. (2021), especially considering that most convenience stores in the United Kingdom offer food retailing. In his dissection of the reason behind this unanticipated trend, Hobbs (2021) concluded that convenience stores performed exceptionally well during the pandemic because of a significant shift in food consumption patterns, from food services to food retailing. Therefore, it can be argued that Garnett et al.’s (2020) hypothesis that the retailing SMEs that rely on international supply chains would suffer immensely during the pandemic was outrightly rejected by the findings of the two studies above (Hobbs, 2021; Rybaczewska et al., 2021). However, it is worth noting that their studies mainly focused on convenience stores, which do not represent the whole SME sector in the retail industry. Especially, according to Montoya and Flores (2021), regardless of successes achieved so far, little is known about the long-term impact of the pandemic, which keeps companies of various sizes uncertain about how to manage and sustain their supply chains in the long term. Overall, of the three challenges investigated so far in this section, supply chain disruptions are the most researched, with mixed observations, especially between studies published in 2020 (e.g., Garnett et al., 2020) and those published in 2021 (e.g., Hobbs, 2021). However, Gourinchas et al. (2020) provided a better picture of the position of the retail industry based on analysis of firm-level data from seventeen countries, among them the United Kingdom. They particularly indicated that the retail and wholesale sector was the seventh most affected industry regarding supply chain disruption among the 17 industries examined (Gourinchas et al., 2020).  In this regard, it can be concluded that empirical observations can differ sharply within a short period because of the evolving nature of the adversities of the pandemic. Therefore, little is known about the future in the long term, and more research is needed as time evolves into the future.

Further, some studies have investigated the exact ways in which the pandemic disrupted supply chains in various sectors. In the literature review section of their study report, McMaster et al. (2020) noted that the cancellation of orders due to demand reduction of various goods and services was one of the greatest ways in which supply chains were disrupted. In agreement with this observation, International Textile Manufacturers Federation (2020) indicated that orders for garments were down by 42% based on a survey conducted between May 20th and June 8th.  As a result, many companies were unable to stay afloat, which is one of the reasons some of them closed their operations permanently (Zhao and Kim, 2021). Therefore, it can be said that supply chain disruption was one of the most significant challenges that SMEs faced during the Covid-19 pandemic. Also, this problem might have been experienced at a higher magnitude by fashion retailing SMEs than other sectors of the economy because of the non-essential nature of clothing, especially during an economic crisis like the pandemic.

2.2.4 Compulsory shut down

The theme of compulsory shutdown cuts across all the other challenges. It is one of the critical reasons retailing SMEs in the UK, and other parts of the world experienced supply chain disruptions and merchandise distribution challenges. However, it is also imperative to discuss the impact of the compulsory shutdowns from the perspective of the performance of retailing SMEs in the United Kingdom. Albonico et al. (2020) reported that 80% of SMEs surveyed revealed revenue growth in the previous year before the pandemic, but 80% reported significant declines in their revenues by the time of the pandemic. The same survey also revealed that revenue decline was the primary reason most SMEs would shut down permanently (Albonico et al., 2020). Therefore, at this point, it can be argued that poor performance is the main reason behind the compulsory shut down of SMEs in the United Kingdom during the Covid-19 pandemic. In agreement with this claim, Gourinchas et al. (2020) discovered that government support only provided a partial shield to SMEs’ failure rates; particularly, failure rates would have increased by 9.1% without government support. The researchers used firm-level data from 17 countries, including the United Kingdom (Gourinchas et al., 2020). Even with government support, most SMEs were still unable to yield productivity from their business loans. These observations agree with the findings of Albonico et al. (2020) that of the surveyed companies, 25% reported that they were likely to default on their loans due to declining revenues. Overall, it can be argued that pandemic-induced movement restrictions forced many SMEs in the retail sector and other industries to compulsorily close down due to performance declines, making them unable to sustain their operations.

          2.2.5 Shift in Consumer Behaviour

As highlighted earlier, a shift in consumer behaviour was not necessarily a challenge for all types of retailing SMEs. For example, Hobbs (2021) argued that a shift from food services to food retailing favoured convenience stores, contributing to their resilience during the Covid-19 pandemic. However, some other types of retailing SMEs suffered immensely due to unfavourable shifts in consumer behaviour. For instance, it was highlighted earlier that some retailing SMEs that could not do home delivery suffered customer loyalty setbacks (Pantano et al., 2020). Before discussing how such changes affected retailing SMEs, it is also imperative to begin by highlighting some ways consumer behaviour changed during the Covid-19 pandemic.

Among other pandemic-induced restrictions, government lockdowns and curfews resulted in significant shifts in consumer behaviour, affecting businesses across the board. According to Kohl, Timelin, Fabius and Veranen (2020), three changes during the pandemic induced consumer behaviour shifts: digital acceleration, economic downturn, and changing consumer preferences. Accordingly, the retail industry is the most affected concerning sales, marketing, and assortment (Kohl et al., 2020). In comparison, Goswami and Chouhan (2021) focused on the psychological mechanisms underlying the shift in consumer preferences. The researchers surveyed 1700 retail customers; they discovered that their attitudes towards the pandemic and their awareness of the Covid-19 pandemic had considerable outcomes on consumer behaviour, particularly change in consumer behaviour and consumption priority and method (Goswami and Chouhan, 2021). A McKinsey & Company survey of US retail consumers revealed that 75% of consumers have tried a new shopping behaviour, particularly shopping online (Charm, Coggins, Robinson and Wilkie, 2020). The survey findings further revealed that high-income earners and millennials were leading in online shopping. A majority of them intended to continue with that shopping behaviour even after the Covid-19 crisis (Charm et al., 2020). In a recent publication by the UK Parliament, changing consumer behaviour was also significantly emphasised; for example, Hutton (2021), the researcher and author behind the report, indicated a significant acceleration of online retailing. However, unlike Charm et al. (2020) that discovered a substantial shift to online shopping, Hutton (2021) indicated that “Online retailing has not resulted in a simple substitution of physical shopping for online shopping, although this has happened to some extent” (p.19). Therefore, it can be said that the external dynamics of the Covid-19 pandemic reality have induced psychological mechanisms in consumers, leading to significant changes in their shopping behaviour and that the retail sector is the most brutally hit industry in light of these changes. The studies and reports reviewed in this chapter utilised adequate sample sizes to support these observations with certainty.

The shift in consumer behaviour affected retailing SMEs in many ways. According to Kohl et al. (2020), most consumers preferred trusted brands during the pandemic. Although the consumers also exhibited a preference for stores that were closer to their homes (Kohl et al., 2020), the tendency for trusted brands is an indication that retailing SMEs, especially those that could not go online due to financial constraints, were affected the most. In agreement, Hutton (2021) indicated that, in the UK, primarily successful stores managed to go online to offer complementary services to their physical stores. In that regard, it can be said that customer preference for trusted brands could be related to the fact that they perceived them as able to help them navigate through the Covid-19 pandemic. This observation agrees with Pantano et al.’s (2020) findings that consumers developed positive perceptions towards retailers that could do home deliveries. In agreement with Hutton’s (2021) findings, a survey of US consumers revealed that 36% were trying a new brand, whereas 25% were incorporating a new private-label brand. In the United Kingdom, a recent survey revealed that 94% of customers were willing to walk away from retailers that could not respond appropriately to the Covid-19 pandemic (Braze, 2020). This finding is closely connected to Goswami and Chouhan’s (2021) claim that consumer awareness of the Covid-19 pandemic influenced their shopping behaviour. In this regard, it can be said that retailing SMEs that could not sustain responses to the Covid-19 pandemic were likely to lose their loyal customers to more giant retailers. A recent study report by the European Parliament revealed that responses to the Covid-19 pandemic forced many businesses across Europe to restructure, resulting in liquidity shocks (de Vet et al., 2021). Hence, cost-cutting became the most prevalent business strategy for most businesses operating within the European Union. In agreement, Enterprise Research Centre (2021) indicated that most SMEs in the United Kingdom focused on cost reduction strategies due to the high costs resulting from responding to the Covid-19 pandemic. Since most consumers were aware of the Covid-19 pandemic and how businesses should respond, it can be argued that retailing SMEs that could not incur the additional costs were possibly forced to shut down their operations because they had even lost their most loyal customers to other brands. However, although these observations are drawn from rigorous empirical studies, it is also imperative to state that no study has explicitly investigated how the shifting consumer behaviour affected retailing SMEs in the United Kingdom. Therefore, claims made in this paragraph are to be treated as theoretical and tentative until confirmed by a stud explicitly investigating the matter.

          2.2.6 Demand reduction

Reduction in demand for retail merchandise during the Covid-19 pandemic is another considerable challenge that faced retailing SMEs in the United Kingdom and the rest of the world. The main reason for demand reduction was the economic downturn as many employees furloughed and structural unemployment (Hutton, 2021). A recent ONS (2021) report revealed that only retail food stores reported a 9.5% increase in sales volume in June 2021 compared to February 2020. In this regard, February 2020 is regarded as a pre-Covid time because the first coronavirus case in the United Kingdom was reported on 31 January 2020, and no significant disruptions had happened by February. ONS (2021) further indicated that non-food retail stores continued to suffer concerning sales volume. For example, reductions in travel saw a significant drop in demand for fuel in the country. However, as more people are getting vaccinated for the Covid-19 pandemic in the UK, the demand for retail goods and services is likely to start gaining momentum. In agreement, a survey revealed that many people accrued savings during the Covid-19 pandemic; following the easing of restrictions, they have shown a robust improvement in demand for retail goods and services (Deloitte UK, 2021). In agreement, a consumer report by Deloitte Insights indicated that during economic recessions, consumers tend to “…keep their wallets tightly closed,” resulting in significant increases in savings (Boersch, Perkins, Geddes and Hollasch, 2021). The researchers further estimated consumers across Europe had accumulated over €450bn+ during the Covid-19 pandemic alone (Boersch et al., 2021). In agreement, Deloitte UK (2021) indicated that already the demand for retail goods and services has started to pick in the second half of 2021. It is anticipated to continue in an upward trend into 2022 and beyond, following the mass rollout of Covid-19 vaccines. However, the demand stagnation challenge facing SMEs is likely to persist as other bigger retail stores regain. These observations are drawn from the fact that consumer behaviours acquired during the Covid-19 pandemic are likely to remain unchanged into the post-Covid-19 phase (Deloitte UK, 2021). As highlighted earlier, retailing SMEs unable to run an eCommerce business due to liquidity issues were the most affected by the pandemic. However, a recent survey by Deloitte Insights (2021) disagreed with Deloitte UK’s (2021) survey, whereby it was discovered that following the vaccine rollout, consumers’ confidence in going to a physical store had increased by 22% between July 2020 and July 2021. The same observation can be seen in consumers’ confidence in engaging in person-to-person service, which increased by 24% between July 2020 and July 2021 (Deloitte Insights, 2021). In that case, the significant improvements in such confidences can imply that their awareness of the Covid-19 pandemic will not affect their perceptions towards how companies respond to the pandemic, as earlier indicated, drawing evidence from Goswami and Chouhan’s (2021) study. However, such claims cannot be stated with certainty because the change of perceptions might not necessarily translate to a reversal to pre-Covid-19 normality. In other words, in agreement with Deloitte UK’s (2021) observations, people may normalise shopping online, which is likely to deny retailing SMEs unable to go online opportunities to recover quickly in the new normal. However, most of the literature cited in this section were consumer reports based on plain surveys without any theoretical basis. Therefore, future research must develop academic guidelines that might be used to create effective frameworks for supporting struggling retailing SMEs to recover from the pandemic. At this point, it is also imperative to review the literature on how SMEs can build resilience post-Covid-19 based on operational implications drawn from previous economic crises.

2.3 Definition of Resilience in the Retail Sector

The definition of business resilience remains highly contested among scholars. While discussing the meaning of true business resilience, Cooper (2019) drew observations from the uncertainties surrounding Brexit and highlighted that true resilience would comprise the strategies that would help businesses achieve continuity amid the tensions. On the same line of thought, Tibay et al. (2018) discussed resilience from companies’ systems to survive external crises. In that context, survival refers to coping with the uncertainties and continuing with business operations as usual (Tibay et al., 2018). The two studies agree on the meaning of resilience based on the fact that they both emphasise external disruptions and business continuity, which, in this case, can be business continuity amid Covid-19 or Brexit. However, while discussing how start-ups can build resilience during the Covid-19 pandemic, Aldianto et al. (2021) added, on top of business continuity, the concept of “ambidexterity.” He argued that businesses need to become more ambidextrous to effectively handle the uncertainties associated with the pandemic while serving their customers.

A closer look into the concept revealed that the researchers borrowed the term from Jansen, Vera and Crossan’s (2009) definition of innovation ambidexterity. They referred to the simultaneous pursuance of innovation while incrementally and interruptedly pursuing change (Jasen et al., 2009). For example, as highlighted in the previous section (2.2.2), the Covid-19 pandemic introduced numerous changes to the business environment to the extent that most retailing SMEs could not cope. In this regard, those businesses that survived the pandemic-induced disruptions are those that managed to pursue the change in an incremental manner while at the same time remaining/pursuing innovation. Therefore, it can be said that innovation ambidexterity is a critical factor to staying resilient amid external disruptions. However, in most research papers, business resilience is ambiguously defined without considering such concepts as business continuity and innovation ambidexterity. For example, while discussing the relationship between business resilience and community resilience, Adekola and Clelland (2019) examined the concept of business resilience using ambiguous terms, such as the ability to prepare for and respond to weather-related crises. In this case, it can be argued that the researchers should have also included the component on how businesses can prepare and respond to such emergencies. The missing of the how element from the definition results in ambiguity and criticism. Additionally, it was noted that the way researchers define business resilience correlates with how they measure it. For example, probably due to the ambiguous nature of their definition, Adekola and Clelland (2019) developed a measurement tool from scratch based on interviews of SME owners. On the other hand, Tibay et al. (2018), who remained relatively specific on their definition of resilience, used a validated measurement tool called ResOrgs Benchmark Resilience Tool in their data collection. However, although these observations might be theoretically valid, it is also possible that Adekola and Clelland (2019) developed their own measurement tool to avoid the unstandardised definition of business resilience in the literature. This subsection focuses on how various studies exploring resilience in the context of the retail sector define the concept. It also focuses on developing a standard approach to measuring SME resilience in the UK retail sector by customising components of various resilience measurement tools used in previous research.

Measuring resilience also tends to differ between scholars because even the scope of definitions of business resilience tends to vary significantly between them (Kativhu et al., 2018). After performing a comprehensive analysis of the literature, Kativhu et al. (2018) recommended a tool called Oxfam GB Multi-Dimensional Approach to Resilience Measuring, which was developed and validated by Hughes and Fuller (2013). Kativhu et al. (2018) argued that it was the most recommended tool for measuring resilience among retailing SMEs in South Africa. Therefore, the economic perspective they based their recommendation on is different from that in the United Kingdom. Therefore, this subsection aims to review the various resilience measurement tools appropriate in the context of the retail sector. Mainly, the dimensions of each of the tools will be discussed using in-depth details to determine the best tool for the UK context. Towards the end of this section, the components of the various tools reviewed will be combined and used to discuss the resilience levels of UK retailing SMEs.

2.3.1 Oxfam GB Multi-Dimensional Approach to Resilience Measuring

Oxfam GB’s measurement tool comprises five dimensions: livelihood viability, innovation potential, the integrity of the built and natural environment, contingency resources and support access, and social and institutional capability (Hughes and Fuller, 2013). The most crucial issue in this regard is the relevance of each of the five dimensions in retailing SMEs in the United Kingdom. First, concerning livelihood viability, Hughes and Fuller (2013) indicated that the wealth status of households contributes significantly to the extent to which communities are resilient. They justified the validity of the measurement tool using evidence of the Somali community in East Africa. They argued that such issues as food security, the size of livestock portfolio, and ownership of property perceived as valuable by the community were significant factors contributing to their community’s resilience. Similarly, in the context of the retail sector, the dimension of household viability also holds much potential in determining the resilience of retailing SMEs in several ways. First, while examining challenges facing SMEs during the Covid-19 pandemic, it was revealed that the amount of consumer savings accrued during the Covid-19 pandemic would greatly influence the recovery rate of the retail sector in Europe post-Covid-19 phase (Deloitte UK, 2021). The primary implication of this assertion is that the household wealth status of UK families tends to determine the volume of retail sales in the country. In other words, most retailers were forced to shut down due to lack of business during the pandemic because most consumers had decided to withhold their savings due to the uncertainties associated with the pandemic. Therefore, from a broader perspective, it can be said that the wealth status of households during and after the economic recession will significantly influence the resilience of retailing SMEs. Although this claim cannot be overstated, the recent UK Parliament report authored by Hutton (2021) indicated that retail sales in the UK are significantly dependent on household goods purchases, such as clothing, food, electronics, and furniture. For example, in 2020, retail sales in Great Britain amounted to £437 billion, whereby, for example, 9 pence were spent on clothing, which was a 25% reduction compared to 2019. In agreement with these findings, a study by Nicola et al. (2020) revealed that the UK Government had noticed a significant reduction in household expenditure during the pandemic, thereby inviting experts to suggest solutions to the situation. As a result, Imperial College’s Centre for Climate Finance and Investment suggested that carbon tax/dividends be channeled to households to boost their expenditure. Thus, it can be said that clothing retailers experienced stagnation in revenues due to reduced household expenditure on clothing due to the Covid-19 pandemic. A report by Euromonitor International (2020) revealed that luxury brands, especially in the fashion industry suffered the most during the pandemic because most people withheld their savings and others could not afford them because they lost their employment. In agreement with this claim, Oxford Economics and Oxford Institute of Retail Management (2012) measured the thriving of the UK retail sector by focusing on the proportion of total household income spent on retail shopping.  Overall, although few studies have focused on how household spending affects the resilience of retailing SMEs in the UK, the current research will focus on this dimension to minimise bias likely to emerge from a situation whereby much emphasis is placed on how consumer behaviour (e.g., online shopping) affected the resilience of retailing SMEs while ignoring other relevant factors.

The second dimension of the measurement tool is innovation potential. Hughes and Fuller (2013) defined innovation potential from the perspective of households’ ability to adjust to change. Some of the key aspects of this dimension include people’s knowledge and attitudes, access to technological solutions, access to market information, and the ability to take risks. First, the aspect of people’s knowledge and attitudes is relevant in the context of retailing SMEs, based on findings of prior research (e.g., Fatoki, 2018). Byukusenge and Munene (2017) surveyed 250 Rwandese SMEs to investigate the mediational role of innovation in the relationship between business performance and knowledge management. However, the author differed with Hughes and Fuller’s (2013) views that knowledge management could be one of the aspects of innovation, hence cannot be treated separately. A closer look into how Byukusenge and Munene (2017) defined innovation revealed that they defined innovation as transforming an idea into a competitive product or service in the market. Therefore, their approach to innovation is less applicable in the context of resilience. Nonetheless, they discovered that innovation was a significant mediator in the relationship between knowledge management and business performance (Byukusenge and Munene, 2017). In their view, knowledge management refers to the utilisation of knowledge to accumulate wealth and achieve prosperity. In this regard, their findings can also be twisted to fit in the context of SME resilience, whereby it can be said that effective knowledge management contributes to people’s innovation potential, particularly when adapting to change. In agreement, Adam and Alarifi (2021) revealed that SMEs are often faced with a lack of knowledge, exposing them to risks and uncertainties associated with crises, such as the Covid-19 pandemic. However, the researchers narrated how external support, such as consultancies and advisory offices, helps SMEs overcome this challenge to build resilience and achieve long-term prosperity (Adam and Alarifi, 2021). Although the researchers did not offer any theoretical basis on the relationship between knowledge and SME resilience, their study’s findings shed much light on the topic under investigation. In contrast, Fatoki (2018) briefly addressed the theoretical basis of the contribution of knowledge to SME resilience using the attribution theory cited from Aishah (2012) and Hedner, Abouzeedan and Klofsten (2011). For example, according to Hedner et al. (2011), the attribution theory states that “…individuals use attributions to establish the relationship between cause and effect. This model explains how individuals attribute success or failure according to the three dimensions: locus of causality, stability, and controllability…” (p.3). The general theoretical proposition of the theory is that most successful entrepreneurs tend to attribute the outcomes of a given event to their internal capability rather than an external influence. In this regard, Fatoki (2018) believed that individuals who tend to attribute the outcomes to their capability are often creative and innovative. In agreement, in their study, Byukusenge and Munene (2017) discovered that the “me-too” syndrome was the most frequent problem affecting SME owners’ innovative potential in Rwanda. In this regard, the business owners could not take any action to address the causation of a negative event because they felt that they were not the only ones being affected; hence, things were taking place out of their internal control. It can be said that such an attitude must have affected many SMEs during the Covid-19 pandemic because owners attributed the reduced performance of their businesses rather than taking adequate action to combat it. However, Byukusenge and Munene (2017) opposed Fatoki’s (2018) observations that knowledge can help people be more innovative and adapt to change. Instead, they argued that many educated people could not run successful businesses because they lacked creativity and innovativeness. At the same time, the two opposing observations can be treated as a two-dimensional representation of a single reality. After all, Byukusenge and Munene (2017) focused on why many educated people could not run successful SMEs, which is a possibility in the external reality because not everyone who is educated can be successful in business. Fatoki’s (2018) assertion can also represent the other side of the reality, such as that most but not all educated people can run successful businesses. In agreement with this claim, Lee (2018) discovered that quality knowledge sharing contributes significantly to an individual’s creativity. Tønnessen et al. (2021) reported similar findings, whereby they discovered that digital knowledge sharing during the Covid-19 pandemic enhanced the creative performance of employees working from home. Even so, Singh et al. (2021) noted that most people working from home during the pandemic were not exposed to quality knowledge sharing, needing a more curated intervention to promote it during times of uncertainty like the Covid-19 pandemic. Therefore, it can be added to Byukusenge and Munene’s (2017) findings that most of the educated people who do not prosper in business due to a lack of innovativeness and creativity because they are not exposed to quality knowledge sharing. Based on these observations, Hughes and Fuller’s (2013) observation that plain knowledge is a key aspect of innovation potential will be replaced with quality knowledge sharing. Therefore, one of the questions used on the instrumentation used in the current study will focus on the level of quality knowledge sharing to measure the resilience levels of retailing SMEs in the United Kingdom during the Covid-19 pandemic.

Apart from knowledge and attitudes, Hughes and Fuller (2013) considered access to technological solutions as a significant contributor to people’s innovation potential. It can be said that this aspect of innovation potential is also relevant in the context of retailing SMEs. This claim was also highlighted in the previous sub-section on the challenges facing SMEs during the Covid-19 pandemic. Most shoppers turned online, forcing businesses to introduce eCommerce solutions to their business models (Koch et al., 2020; Pantano et al., 2020). It is worth noting that technical knowledge and skills play a significant role in technological adoption by SMEs. Prasanna et al. (2019) conducted a systematic review to examine the relationship between technology adoption and SME performance, whereby they revealed that knowledge and innovation were crucial determinants. Therefore, their findings agreed with Hughes and Fuller’s (2013) assertion, despite that they undertook a similar approach to that of Byukusenge and Munene’s (2017) study when defining innovation, which is why they also treated knowledge and innovation as two different entities. Mainly, in their view, innovation implied the utilisation of scientific breakthroughs to enhance business performance (Prasanna et al., 2019). However, although they treated knowledge as a separate entity or variable, it can also be said that without knowledge, such innovation, such as the interpretation of scientific breakthroughs, requires knowledge and skills. Therefore, they should have considered knowledge as an aspect of innovation rather than separating the two. Besides, a 2020 survey by McKinsey & Company agreed with Prasanna et al.’s (2019) findings that technology can help enhance the resilience of businesses. Notably, the survey revealed that customer digital interactions increased significantly during the pandemic than pre-pandemic times (LaBerge, O’Toole, Schneider and Smaje, 2020). For example, in Europe, digital customer interaction accelerated by three years within only six months into the pandemic, from 32% to 55%. These findings imply that the businesses that managed to go online developed the potential to tap the new technological opportunities presented with the pandemic—in other words, going online enhanced businesses’ resilience to recover from the pandemic. In agreement with this observation, Nah and Siau (2020) conducted a comprehensive literature review to investigate how technology can help businesses remain resilient during the Covid-19 pandemic. In the conclusion section of the article, the researchers stated that “…organizations that have the psychological capital to innovate using the blue ocean strategy and are supported by modern and advanced IT infrastructure and development will have an edge in adapting to and recovering from the pandemic” (Nah and Siau, 2020, p.594). In this regard, the researchers also connected their findings with the attribution theory, arguing that knowledge attitudes are essential prerequisites when developing resilience through technological adoption. However, none of the studies reviewed in this paragraph provided quantitative estimations of the impact of technology adoption on the resilience of retailing SMEs. Effect sizes of technology adoption on resilience building can help SMEs determine the resources they can dedicate to this strategy. Overall, at this point, it can also be said that technological adoption is one of the most relevant aspects of resilience building for retailing SMEs in the United Kingdom. Therefore, another question to be included in the data collection instrumentation used in the current study is the level of technology adoption among retailing SMEs in the United Kingdom towards building resilience during the Covid-19 pandemic.

The third aspect of the second dimension of Oxfam’s instrument is access to market information. Hughes and Fuller (2013) indicated that the Somali community did not report any significant problems concerning access to livestock pricing information. In other words, the community’s merchandise is livestock, and hence they need to access relevant market information to accumulate wealth and achieve prosperity (Hughes and Fuller, 2013). Access to market information is also a critical success factor for retailing SMEs. A recent study revealed that access to business information had a positive impact on the performance of SMEs in the developing world (Ngetich, 2020). However, the study undertook a descriptive approach and did not provide effect size estimation. In a related study conducted in the tourism industry, Gębarowski (2014) revealed that participation in exhibitions and business shows provided SMEs an opportunity to access market information, such as learn about customer needs, the demand for various products, latest industry trends, and information about their competitors, through knowledge sharing. It is also important to note that the mechanism through which knowledge sharing facilitates innovation among SMEs is through the exchange of market information. These findings are affirmed by a recent study by Sospeter and Nchimbi (2018), which revealed that women entrepreneurs in developing countries like Tanzania lacked access to pricing information, leading to a scenario whereby one could sell her products four times lower the average market price. In contrast, lack of access to business/market information is less prevalent in the developed world. This claim can be justified based on Hutton’s (2021) comprehensive analysis of the retail sector in the United Kingdom. In the research report presented to the UK parliament, access to business information was never highlighted as a significant challenge facing retailers in the country (Hutton, 2020). However, there are concerns in the literature of information asymmetries in the country, which negatively affect access to finance and SMEs’ overall performance. For example, according to a survey conducted by the Bank of England (2020), SME borrowers are more likely to know more about the prospects of their businesses than the lender; such asymmetry is expected to make the loan a risky proportion because the lender needs to understand the business model and its potential before providing the loan. Such a situation was likely to emerge because SMEs had little access to financial information (Bank of England, 2020). However, the Bank of England’s (2020) investigation was more about how the bank can access more details about SMEs’ business models and potentials than how SMEs can access finance. A government report by the Department for Business & Skills (2012) confirmed this claim, arguing that structural market failures resulted in qualifying SMEs being refused access to finance, which had wider economic implications. According to the World Bank (n.d.), there is a financial access gap of 15% for SMEs in Europe, which can be argued that a significant proportion of this gap is contributed by businesses’ lack of access to related business information. Although access to business information remained an essential factor to be considered during the Covid-19 pandemic as more and more SMEs needed financial support, no UK study has so far investigated the impact lack of access to information had on the performance of retailing SMEs. The only available literature is descriptive surveys that do not offer inferential statistics to measure the effect sizes of the impact. At this point, it can be said that access to business information is a crucial aspect of innovation potential for SMEs, especially during the Covid-19 pandemic. Therefore, in the modified version of Oxfam’s instrument, one of the questions will focus on this aspect and how it affected resilience building.

The final aspect of the second dimension of Oxfam’s resilience measurement instrument concerns households’ ability to take risks. For example, in the context of the Somali community, where they tested and validated the tool, families were unable to manipulate the risk of exposure to drought (Hughes and Fuller, 2013). Risk-taking can also be considered relevant in the context of retailing SMEs for various reasons. First, during the Covid-19 pandemic, risk-taking became a highly fragile venture due to decreasing revenues. For example, according to the International Organisation of Securities Commissions (2020), the Covid-19 pandemic induced increased volatility and reduced profitability in the retail sector, resulting in a situation where investors are lured into investing in volatile markets to make a profit. Though, struggling firms may start offering riskier products that can potentially harm investments. However, the International Organisation of Securities Commissions (2020) observations were notably less relevant in retailing SMEs because they targeted huge companies listed in the securities stock exchange. Besides, the observations were based on expert opinion rather than primary or secondary data. Instead, in the context of retailing SMEs, operating amid the pandemic was a risky venture, which can be termed a form of risk-taking in business. In agreement with this claim, Abu Hatab, Lagerkvist and Esmat (2020) surveyed 166 SMEs in the agri-business sector in Egypt, whereby they discovered that risk perception during the Covid-19 pandemic was determined mainly by the quantity of cash flow and assets a business owned. In that regard, cash and assets helped buffer against the Covid-19 pandemic (Abu Hatab et al., 2020). Another survey of more than 4,800 Chinese SMEs revealed that cash flow risks were among the main challenges they faced during the pandemic because they were forced to shut down due to government regulations. Yet, they were paying fixed expenditures (Lu, Wu, Peng and Lu, 2020). The findings of Lu et al. (2020) agree with those of Abu Hatab et al. (2020), indicating that SMEs in developing countries faced cash flow risk as one of the main challenges. Seemingly, the outlook of the issue might not be much different in developed countries. For example, while drawing evidence from how businesses handled the 2007/2008 financial crisis, Moretto and Caniato (2021) observed that supply chain finance helped revise companies. Still, SMEs continued to struggle long after the crisis because they were unable to access credit. Financial institutions poured liquidity into businesses, but these funds were accessed inequitably since most SMEs could not access credit (Moretto and Caniato, 2021). As highlighted earlier, one of the challenges that faced the UK’s retailing SMEs was that they had limited access to financial information on how to access credit (Bank of England, 2020). Therefore, it can be said that they must have also been struggling to mitigate cash flow risks. However, so far, no accessible study has investigated the risk perceptions of UK SMEs and how such perceptions influenced their risk-taking responses. Due to this gap in the literature, the current research considers risk-taking to be an important activity to building resilience amid the Covid-19 pandemic. However, since most SMEs were unable to mitigate the risk, it is imperative to assess the degree to which the pandemic affected retailing SMEs’ ability to build resilience from the perspective of risk-taking. In that regard, those businesses that managed to take the risk are considered more resilient than those that did not.

The third aspect of Oxfam’s measurement instrument involves the integrity of the natural and built environment. However, it is the least relevant in the context of the Covid-19 pandemic because, unlike a natural calamity, the effects of the pandemic were concentrated on other business aspects, such as supply chain disruptions. In their analysis of the resilience of the Somali Community, Hughes and Fuller (2013) focused on four aspects of the integrity of the natural environment, namely soil erosion, availability of water, and access to grazing land. Although there might be some connection between the Covid-19 pandemic and the natural environment, there is no clear linkage between their relationship with retailing SMEs. Therefore, in the data collection instrument used in the current study, this dimension will deliberately be left out and be substituted by other dimensions borrowed from other tools discussed later in this chapter.

The fourth dimension is contingency resources and support access, which has already been briefly highlighted in the previous paragraphs, such as the issue of access to credit. According to Hughes and Fuller (2013), access to government support is not the only aspect of this dimension; others include social connectivity, asset ownership, savings, earnings, and group participation. Before discussing the relevance of each element in the context of retailing SMEs, it is imperative to note that the aspect of asset ownership correlates with the element of risk-taking discussed under the second dimension. This claim is supported by Abu Hatab et al.’s (2020) finding that the amount of cash and the number of assets possessed by SMEs determined their risk-taking ability during the Covid-19 pandemic. A recent report by the UKaid (2020) reported that SMEs owned by women and minorities would be more affected by the pandemic because they own relatively lower amounts of assets, such as land, finance, infrastructure, and digital technologies, to build resilience for their businesses. UKaid (2020) added that developing countries in Sub-Saharan Africa were more exposed to this problem due to gender-discriminatory legislation in their respective countries that were likely to undermine their social participation and access to government support. However, UKaid (2020) focused more on troubled countries in Sub-Saharan Africa, and the report was vastly less relevant in the UK context, especially in retailing SMEs. Even so, UKaid’s (2020) report agreed with Abu Hatab et al.’s (2020) finding concerning the importance of asset ownership in building retailing SMEs’ resilience, especially during the Covid-19 pandemic. In comparison to their observations, Pal, Torstensson and Mattila (2014) surveyed Swedish SMEs in the textile and clothing industry, whereby they discovered that economic crises damage their assets as revealed by their bankruptcy rates accelerating significantly in that period. Pal et al. (2014) drew their observations from the 2008/9 financial crisis, whereby the number of SMEs that went bankrupt doubled in the short period of the crisis. In agreement, Albonico et al.’s (2020) survey of 600 UK SMEs in May 2020 revealed that more than half of them felt they could be going out of business, despite improving their perceived resilience from April 2020. In other words, the survey results implied that resilience perceptions were closely associated with asset ownership by UK SMEs. Those that felt they could be out of business within 12 months also reported struggles with funding their fixed expenditures, agreeing with Lu et al. (2020) that most Chinese SMEs continued to cater for their fixed expenses following the government’s directive to close their businesses to curb the spread of the pandemic. However, it is worth noting that no study among those cited in this paragraph has examined the level of correlation between the level of asset ownership and resilience perception among retailing SMEs. Even so, they provided deep insights into how the Covid-19 pandemic affected SMEs’ resilience building from the perspective of asset damage. Therefore, while assessing the resilience levels of retailing SMEs to fulfill the aims and objectives of the current study, asset ownership and resilience will be measured as perceptions rather than as absolute figures. For example, a confident business owner with much lower profits and assets can consider the business more resilient than another business owner that makes more profits and has more assets. This concept will be highlighted further in the theoretical framework of the current study, which is discussed later in this chapter.

The second aspect of the fourth dimension of Oxfam’s instrument concerns social connectivity and group participation. According to Hughes and Fuller (2013), group participation and social connectivity offered the Somali community more opportunities for support in times of a crisis. Their emphasis on the importance of the two aspects was also reiterated by the UKaid (2020) that women’s group participation, such as SEWA, in Delhi, offered them an opportunity to connect to government relief programmes during the Covid-19 pandemic. Although the observations in the two reports (Hughes and Fuller, 2013; UKaid, 2020) were based on community evidence, they can also be considered relevant in the context of SMEs in the United Kingdom, especially considering that pandemic-induced curfews and lockdowns limited people’s participation in social gatherings which offer opportunities to obtain helpful information. As highlighted earlier, Gębarowski (2014) discovered that involvement in business exhibitions and trade shows helped SMEs in the hotel and tourism industry to access market information, such as industry trends, customer demands, and more. Therefore, it can also be said that such participation can help SMEs access information to government relief programmes during a crisis. This claim is consistent with Measson and Campbell-Hunt’s (2015) observation that SMEs’ participation in international trade fairs offered them an opportunity to gather more information and promote and sell their products in global supply chain values. In other words, such participations are a form of exposure that helps them access support to government relief programmes and expand their supply chains. A recently-published study that surveyed 229 Australian and New Zealand international SMEs revealed a significant positive correlation between participation in international trade fairs and the development of networks through trade shows (Gerschewski, Evers, Nguyen and Froese, 2020). The study further indicated that the development of such networks, in turn, promoted their operational performance, and subsequently, financial performance (Gerschewski et al., 2020). In contrast, a research paper presented in the 11th International Entrepreneurship Forum held in m Kuala Lumpur, Malaysia, 4-6 September 2012 revealed that most SMEs continued to struggle to participate in international trade fairs and trade shows due to financial constraints and lack of special knowledge to prepare and realise successful fair participation (Prause, Feuerhake and Hochheim, 2012). Although the researchers were not country-specific, their observations can be extended to the UK context based on the challenges facing UK SMEs, such as a lack of knowledge on handling crises (Adam and Alarifi, 2021). Besides, unlike previous financial problems, the pandemic-induced financial emergency is unique in a way that SMEs cannot participate in international trade fairs due to travel restrictions and lockdowns. From this observation, it can be concluded that the magnitude at which retailing SMEs faced the challenge of lack of access to business information through business networks was higher during the Covid-19 pandemic than previous crises, considering their financial troubles and pre-existing difficulties. Also, no study among those cited in this paragraph has investigated the extent to which retailing SMEs lost their business networks due to the pandemic and how such losses affected their resilience. Hence, due to the relevance of this aspect, it will also form part of the data collection instrument of the current study.

Finally, the third element of the fourth dimension of the measurement tools pertains to savings and earnings. Concerning earnings, much has already been discussed previously, whereby it was revealed that all types of SMEs experienced significant revenue growth reductions during the pandemic (Albonico et al., 2020). Therefore, this paragraph focuses on how the pandemic affected retailing SMEs’ savings. According to Hughes and Fuller (2013), the more savings a household has in the Somali community, the more resilience they have in facing any crisis. In this regard, the idea of savings can also be linked closely to asset ownership discussed earlier. In addition to that information, UKaid (2020) indicated that women business owners were at risk of losing up to 30% of their savings to the pandemic, likely to cause the permanent closure of the enterprises. This idea agrees with Lu et al.’s (2020) observation that Chinese SMEs experienced significant financial challenges during the pandemic since they had to continue incurring fixed expenses regardless of remaining closed. In that case, it can be said that an SME that had more savings was more likely to endure the long periods of lockdowns and curfews, whereas those that did not were likely to go bankrupt shortly after, leading to their permanent closure. The situation is more likely to have been worse in the United Kingdom than in other developed countries because of Brexit uncertainties that preceded the pandemic. For example, according to Hampshire Trust Bank (2019), due to Brexit uncertainties, the SME savings account average in 2019 was £429,000, down from £446,000 in 2017 and £556,000 in 2016 as more SMEs engaged in looking down to pay loans and invest in the future amid the Brexit uncertainties. In agreement, Shawbrook Bank (2019) reported that there was a 21% decline in SMEs’ opening of savings accounts in 2019, which can also be attributed to the Brexit uncertainties. Therefore, at this point, it can be argued that considering savings as a significant contributor to SME resilience, most UK SMEs faced the Covid-19 pandemic when they were already less resilient due to the damages caused by Brexit uncertainties. Although SMEs’ savings statistics during the Covid-19 pandemic are unavailable, it can be argued with certainty that the decline might have continued even further as most SMEs were temporarily or permanently shut down. Others were forced to spend their savings on fixed expenditures without accumulating any income. So far, no study has investigated how savings contribute to the resilience of retailing SMEs in the UK, especially during crises, such as Brexit and Covid-19. Most of the sources cited in this paragraph were organisational reports and surveys by third-party institutions like McKinsey & Company. Therefore, there is a need to investigate the effect size of savings in contributing towards access to contingency resources, which, in turn, add up to SMEs’ overall resilience to overcome the pandemic. As such, savings will be one of the items of the data collection instrument used in measuring resilience in the current study.

The final dimension of Oxfam’s resilience measurement tool is social and institutional capability. While examining the Somali community, Hughes and Buffer (2013) indicated that the dimension is concerned with “…the effectiveness of formal and informal institutions in reducing risk, supporting positive adaptation, and ensuring equitable access to essential services in times of crisis” (p.5). In agreement, in their comprehensive review of the literature, Zutshi et al. (2021) indicated that social changes, such as social distancing and social interactions, influenced SME transformation, which, in turn, had a significant impact on their resilience building. The same findings were reported by Ratten (2020), who argued that social interaction through physical means enhances the formation of a more cohesive international society, making it less challenging for businesses to predict customer behaviour. Thus, minimal social interaction through physical means during the Covid-19 pandemic implies a less cohesive society, making it more difficult for businesses to predict customer behaviour, which means the pandemic threatened SMEs’ social capability. The critical elements of this dimension included in the examination of the Somali community’s drought resilience in Hughes and Buffer’s (2013) are as follows:

• Awareness of drought preparedness plan.
• Participation in the drafting of drought preparedness strategies.
• Receiving drought preparedness information.
• Perception of the effectiveness of local leaders/institutions’ capability to handle drought.

While discussing challenges facing retailing SMEs during the Covid-19 pandemic, it was highlighted that customers’ awareness of how retail stores should act to curb the spread of the pandemic influenced their shopping decisions (Goswami and Chouhan, 2021). However, the study did not highlight SMEs’ levels of awareness on how to handle the pandemic. Even so, Hughes and Buffer (2013) indicated that this dimension could be accessed from a community perspective without necessarily focusing on individual SMEs. First, the United Kingdom has remained at the forefront in funding the development of vaccines against Covid-19. For example, according to a publication of the UK Government’s recovery strategy, the government contributed £388m towards the global $8bn international calls for the development of vaccines, which was the most significant contribution by a single country to the Coalition Epidemic Preparedness Innovations (HM Government, 2020). The UK Government also pledged to provide £330m each year for five years to contribute to Gavi (Global Vaccine Alliance), making the UK the largest donor to the initiative (HM Government, 2020). Therefore, it can be said that the UK Government, through its formal institutions, has demonstrated sufficient commitment to building recovery capability not only for its economy but also the worldwide economy. In contrast, as highlighted in the previous paragraph, the social power of SMEs from the perspective of informal institutions was threatened due to social distancing restrictions, leading to more people interacting digitally (Ratten, 2021; Zutshi et al., 2021). In their study, Hughes and Buffer (2013) implied that formal and informal social institutions are complementary when contributing to the social and institutional capabilities of the Somali community. This claim is reinforced by Escandon-Barbosa, Urbano-Pulido and Hurtado-Ayala’s (2019) analysis of more than 30,000 businesses from 39 countries to investigate the relationship between entrepreneurship and informal and formal institutions. The study revealed that the two types of institutions contribute to businesses’ social capital, which, in turn, influences entrepreneurial activities (Escandon-Barbosa et al., 2019). As a characteristic of social capital, the study revealed that such institutions had the most significant influence on the relationship between corruption and entrepreneurial activity in developed countries (Escandon-Barbosa et al., 2019). In other words, although the UK Government, through its formal institutions, provided considerable support to SMEs, the conspicuous minimal presence of informal institutions due to social distancing, lockdowns, and curfews might have resulted in a more significant impact of corruption on entrepreneurial activity. Consequently, businesses’ resilience building was hurt due to the asymmetry caused by the unequal contribution between formal and informal institutions.

Further, since perceptions play a significant role in determining the resilience of SMEs, the most critical issue is whether SMEs were aware of the government’s recovery strategy. So far, no study has examined their awareness and how it might have contributed to their preparedness to adapt to the new normal changes. Besides, it is unclear whether SMEs were adequately engaged in drafting the government’s recovery strategy. It will also be imperative to survey SMEs and ask if they believe the government engaged them sufficiently when developing the plan. It can also be said that SME engagement could be significantly correlated with their awareness of the recovery/preparedness strategy. Finally, according to a McKinsey & Company survey of 600 SMEs, more than half felt that the UK’s economic outlook was weak (Albonico et al., 2020). However, it was not evident in the survey whether such perceptions were related to SMEs’ perceptions of the government’s effectiveness in handling the pandemic and normalise the situation. From a psychological perspective, perception theories argue that perception is a mental process that determines how people react to situations (Thornton and Mitchell, 2017). Therefore, a lack of SME engagement and awareness of the government’s recovery strategy can affect how SMEs perceive the government’s effectiveness in handling the pandemic, subsequently affecting how they mobilise resources and capabilities to adapt to the new changes. In agreement, a study revealed that company’s perception of a crisis determined their development of primary crisis management strategies (Penrose, 2000). Hence, based on this theoretical support even if objective data lacks in the literature, it can be said that social and institutional capability from the perspective of SMEs’ perceptions of the Covid-19 pandemic influenced their resilience building. The four aspects of this dimension will also form part of the items of the resilience measurement tool used in the current study.

          2.3.2 Resilience Measuring Against the Disruptive Event

As highlighted in sub-sections 2.2 and 2.3.1, the Covid-19 pandemic was a disruptive event. Therefore, as much as Oxfam’s resilience measuring instrument holds much relevance, it is also imperative to focus on a resilience measurement tool that focuses on a disruptive event. In that regard, Kativhu et al. (2018) noted that Westrum’s (2006) tool, which has three dimensions, could be a suitable tool for that purpose. The tool’s dimensions include threat detection, prevention, and adaptation attributes (Westrum, 2006). This sub-section discusses the aspects of each of these dimensions while highlighting their relevance in the Covid-19 context. A critical comparison with Oxfam’s resilience measurement tool will also be performed to determine their level of substitution to one another. Towards the end, a theoretical model combining various dimensions will be developed, and its relevance also discussed.

According to Kativhu et al. (2018), Westrum’s (2006) resilience measurement tool is considered comprehensive in measuring the resilience of small retail businesses because it demonstrates resilience as a business’s ability to detect a disruptive event, prevent consequences, and adapt to new changes. However, before digging deeper into the details of each dimension of the tool, it is imperative to mention that the Covid-19 pandemic was not predicted even by governments across the world. Therefore, it emerged as a resilience-destroying disruptive event because it left businesses with only the options of adapting to consequences that had already occurred. Even so, all three elements of the tool are relevant. For example, according to Westrum (2006), “Predictability does not mean that we can predict when the event will take place, but only that it takes place fairly often” (p.55). The author went ahead and categorised threats or disruptive events into three: regular, irregular, and unexampled events. Regular threats occur often, and businesses can adopt standard responses; irregular threats are one-off events, making it highly challenging to develop standard responses unless the team responsible is highly gifted; an unexampled event is the one that is so unexpected and requires a significant shift in the mental framework (Westrum, 2006). Based on these explanations, it can be argued that the Covid-19 pandemic was an unprecedented event because nobody anticipated its occurrence and its devastating nature. It was abrupt that it caught businesses of all types and governments off guard and unprepared, resulting in severe response strategies, such as lockdowns, curfews, and social distancing, all of which had significant negative consequences on businesses. However, it is worth noting that Westrum’s (2006) ideas were largely borrowed from secondary sources and their tool has never been applied in any study that could be retrievable for review. However, in the acknowledgement section of their chapter, the author indicated that most of the ideas suggested were borrowed from expert propositions in a conference which he did not specify. However, Westrum’s (2006) tool was still is relevant because the ideas suggested therein have been validated in other research studies. For example, in agreement with Westrum (2006), García-Cremades et al. (2021) argued that the evolutional nature of the infections makes it extremely challenging to predict incidences, especially when considering the nature of human behaviour, which is a significant factor in the predictability model. In other words, it can be said that even after its occurrence, the disruptive patterns of the pandemic remain highly uncertain. However, García-Cremades et al. (2021) conducted an epidemiological study that holds less relevance in a business context, meaning its findings can only be used as an example for Westrum’s (2006) ideas rather than to validate them. For example, Westrum (2006) argued that an unexampled disruptive event is improbable to be neatly predicted, and responders develop an effective response algorithm. “Instead, the basic qualities of the organization, its abilities to self-organize, monitor and formulate a series of responses, will determine whether it can react effectively” (Westrum, 2006, p.58). Westrum (2006) went ahead and likened the AIDS pandemic to an unexampled disruptive event that demonstrated the resilience levels of different countries, whereby developing countries remained more troubled than developed countries, indicating their different resilience levels. Perhaps, Alves et al.’s (2020) study can help justify the examples provided by Westrum (2006), whereby they interviewed SMEs in China after the outbreak of the Covid-19 pandemic. They discovered that SMEs with a formal crisis management strategy and plan before the outbreak and a long history of effective crisis management were more likely to adapt to the new changes more quickly than those that did not. Their findings agree with Westrum’s (2006) immediate quote above that organisational capacity is the only effective way to handle unexampled disruptive events. Therefore, at this point, it can be said that since nobody anticipated the emergence of the Covid-19 pandemic and no business has a confident prediction due to its irregular evolutional nature, internal business capacities are the most significant determinants of SMEs’ survival during and after the pandemic. Therefore, this observation adds more weight to the dimension of innovation potential of Oxfam’s resilience measurement instrument. As such, one of the items of the data collection instrument for the current study will entail how the low predictability of the evolutional nature of the pandemic has affected retailing SMEs’ operations.

Further, the second dimension of the tool concerns the prevention of the consequences likely to emerge from the disruptive event. However, Westrum (2006) recommended the need to categorise disruptive events into two, namely internal and external. In this regard, the Covid-19 pandemic was an external disruptive event, making it harder to predict, especially for SMEs. Westrum (2006) further highlighted that no company can predict the nature of a specific event but at least should be prepared to handle the negative consequences of a disruptive event of a certain magnitude. For example, in this review, many studies (e.g., Pal et al., 2014) had investigated how companies can prepare for financial crises by drawing evidence from the 2008/9 worldwide economic crisis. In that regard, it can be argued that even if the disruptive nature of the Covid-19 pandemic was not predictable, its consequences, such as the financial crisis caused, could have been prevented by well-prepared companies. This observation agrees with Alves et al.’s (2020) observation that Chinese SMEs with a formal crisis management plan/strategy were more likely to respond effectively to the Covid-19 pandemic. Although the researchers did not reveal the contents of their crisis management strategies, it can be argued with certainty that they were based on lessons learned from prior crises, especially considering their observation that experience in crisis management was also crucial towards adapting to the negative consequences of the pandemic (Alves et al., 2020). However, these claims are to be treated tentatively because Alves et al.’s (2020) study was qualitative in nature, whereby managers of six SMEs were interviewed. They made quantitative-like inferences, such as their observation that businesses with experience in crisis management were more likely to handle the pandemic effectively than those with less experience. Such observations should be treated cautiously because of their small sample size and the qualitative nature of their study. Instead, no available quantitative study has examined the impact size of experience on handling the Covid-19 pandemic. Instead, descriptive studies exist. For example, in the United Kingdom, most SMEs responded through cost reduction strategies, product diversification, and the introduction of digital technologies (Enterprise Research Centre, 2021). However, Enterprise Research Centre (2021) did not indicate whether such strategies were developed based on lessons learned from previous crises. The finding that a considerable number of SMEs were forced to close down because they could not adapt effectively (e.g., Albonico et al., 2020) reflects the vulnerability levels of SMEs, which means most are unable to prepare in advance and prevent the negative consequences of the pandemic. Overall, according to Westrum (2006), what matters most is the ability to predict the outcomes of a given disruptive event rather than anticipating the event itself. In this regard, it can be said that the negative consequences of the pandemic were not much different from previous crises. Besides, many organisations and research institutions (e.g., Bibby Financial Services, 2020) had predicted the likely consequences of government restrictions on businesses. Businesses should have used this information to develop their response strategies. Even so, Bibby Financial Services (2020) indicated that 39% of UK SMEs surveyed in April 2020 hard wholly closed down due to inability to cope with government restrictions. So far, no study has examined how retailing SMEs in the United Kingdom responded to prevent the negative consequences of the pandemic, considering they were predictable. Therefore, in the current study, SMEs will be interviewed on how they responded to the pandemic and their challenges in drafting their response strategies. The qualitative data will supplement the quantitative data on retailing SMEs’ resilience levels and their relationship with their operational and financial performance.

The final dimension of Westrum’s (2006) measurement tool is an adaptation to the new changes. One of the key aspects of Westrum’s (2006) is the idea of learning, which is an attribute of organisational flexibility to redesign its processes and still retain its competitive advantage. Therefore, this dimension can be linked to Lee’s (2018) idea of knowledge sharing as one of the critical aspects of innovation potential. Since the idea of knowledge sharing has been discussed under the second dimension of Oxfam’s resilience measurement tool, it will be given minimal attention in this paragraph. The second aspect of adaptation highlighted by Westrum (2006) is the monitoring of what is happening in the organisation. In this regard, Westrum (2006) did not recommend monitoring the disruptive event itself but the organisation itself. Therefore, although closely related, it could be inappropriate to argue that this aspect is equivalent to Oxfam’s dimension of social and institutional capacity, and particularly the awareness of preparedness to deal with the disruptive event (Hughes and Buffer, 2013). At the same time, it can be hard to categorise Westrum’s (2006) aspect of monitoring under social and institutional capability; it is more of an internal aspect, whereas Oxfam’s dimension of social and institutional capability is more of an external element because it focuses on aspects that are out of organisational direct control, such as government support. Whereas Hughes and Buffer’s (2013) study directly focused on community resilience, Westrum (2006) drew his observations from a wide range of world events, such as the 9/11 terrorist attack in the United States and World Wars, implying that both authors’ observations could be relevant in the Covid-19 pandemic context. Although Hughes and Buffer (2013) did not include the aspect of monitoring in the measurement tool, a later publication by Oxfam GB emphasised that resilience-sensitive monitoring and learning are crucial to resilience building and improvement (Oxfam International, 2018). They particularly agreed with Westrum (2006) that monitoring the progress of resilience in an organisation is part of resilience building. The main weakness of Westrum’s (2006) publication is that he failed to provide standardised ways of monitoring resilience in an organisation. On the other hand, Oxfam International (2018) proposed about two tools that can be used: (a) spider web tool and (b) tool to track multi-stakeholder collaboration and dialogue. In agreement to (b), Westrum (2006) provided an example of poor collaboration between the police department and the fire department during the 9/11 terrorist event as one of the greatest impediments to the successful control of the situation. However, at the same time, it is imperative to acknowledge that although Oxfam International (2018) provided credible information, they did not provide any evidence of validating their information from a community resilience perspective. However, they did indicate that the publication was based on an earlier (2016) publication on a conceptual framework on resilience building. A closer examination of the earlier publication revealed that their resilience-building framework was based on field data, by using case studies from arid and semi-arid areas in Kenya, such as Turkana County (Castillo, Jeans and Thomas, 2016). Therefore, since Oxfam International (2018) was based on the validated framework, it can be said that the information provided therein is also valid, which, in turn, validates Westrum’s (2006) ideas. In agreement, the idea of monitoring if a certain resilience approach is contributing to households’ and communities’ resilience in handling crises was also endorsed by the USAID (Picon, 2018). Therefore, at this point, it can be argued that the quantitative part of the current study will ask participants whether their SMEs monitored their resilience or not, whereas the qualitative part will capture the specific approaches that SMEs used to monitor their resilience. Since resilience monitoring is endorsed by many institutions and scholars (e.g., those cited in this paragraph), it is also imperative to dig deeper into the outlook of resilience outcomes.

Westrum’s (2006) final adaptive aspect is called rooting up the problem. Based on the explanation the author offered, it can be compared with Castillo et al.’s (2016) resilience outcome measures. Mainly, Westrum (2006) introduced a concept of latent pathogens, which are the problems introduced into an organisational system by the disruptive event. For example, the challenges facing retailing SMEs at the beginning of this chapter can be referred to as latent pathogens. The author borrowed the concept heavily from an earlier paper he published in 2003, which was primarily concerned about the removal of latent pathogens. However, the paper is no longer available online for methodological assessment to determine the validity and reliability of the claims made by Westrum (2006). Instead, closely related papers were discovered written by the same author that offered some insights into how latent pathogens can be removed from an organisation. For example, according to Westrum (2004), organisational culture can influence the kind of latent pathogens an organisation encounters and how they are removed. The author combined case study analyses and some systematic research to investigate organisational culture typologies from the perspective of information processing and how such cultural orientations influence an organisation’s behaviour when trouble arises. In his 2003 study cited in Westrum (2006), the author indicated that “…organisations that create alignment, awareness, and empowerment among the workforce are likely to be better at removing latent pathogens, and are therefore likely to have a lighter ‘pathogen load’” (p.63). These observations indicate that the 2003 study’s findings were consistent with Westrum’s (2004) research study, whereby he discovered that information culture was associated with organisational performance, including safety, and error reporting. What these findings insinuate is that an information culture is associated with higher levels of resilience monitoring and learning, which, in turn, helps organisations to be more adaptive. In agreement with this claim, Castillo et al. (2016) indicated that one of the outcome aspects of resilience that should be closely monitored is adaptive capacity. Particularly, Castillo et al. (2016) defined adaptive capacity as “The capacity to make intentional incremental adjustments in anticipation of or in response to change, in ways that create more flexibility in the future” (p.12). However, unlike Westrum (2006) that focused on adaptive capacity only, Castillo et al. (2016) went ahead and focused on two more types of resilience capacities, namely transformative capacity and absorptive capacity. They defined transformative capacity from the perspective of equitable sharing of risk to ensure that vulnerable populations are not affected more profoundly than the rest of the population (Castillo et al., 2016). In this regard, it can be said that this type of resilience outcome is more relevant in the context of communities rather than businesses. However, at the same time, it can be relevant in the context of the business environment because it can be a form of retailing SMEs’ owners’ perceptions of whether the government was able to ensure the equitable sharing of the negative consequences of the Covid-19 pandemic regardless of business size. However, prior findings have consistently pointed out that SMEs were more vulnerable to the pandemic than larger firms (e.g., OECD, 2020). Finally, absorptive capacity is an organisation-level outcome because it focuses on the ability to cope with known shocks and disruptions (Castillo et al., 2016; Oxfam International, 2018). Castillo et al. (2016) added that absorptive capacity, adaptive capacity, and transformative capacity interact constantly because, as seen earlier, the five dimensions of Oxfam’s resilience measurement tool are also in constant interaction.

2.4 The Relationship between SME Resilience and Strategic Performance

As discussed further in the methodology section, the current study will quantify the resilience levels of retailing SMEs in the United Kingdom by investigating the relationship between resilience and strategic performance. The idea of strategic performance was preferred in this study because it best suits the Covid-19 context, whereby companies were forced to develop new strategies to cope with the pandemic. According to Micheli and Manzoni (2010), strategic performance (SP) refers to achieving strategic goals and objectives. Therefore, SP measurement (SPM) refers to monitoring how an organisation defines and achieves its strategic goals by aligning them with its staff’s attitudes and organisational behaviour, which, in turn, can positively impact organisational performance (Micheli and Manzoni, 2010). Marketos and Theodoridis (2006) agreed with these observations, but unlike Micheli and Manzoni (2010) that focused on the general practice of SPM without focusing on a specific sector or industry, the former focused on the concept within the retail industry. Marketos and Theodoridis (2006) added that strategic decision-making in any organisation is a responsibility of the top management, as lower-level managers focus on tactical and operational performance. In the current study, strategic decision-making’s scope among retailing SMEs in the UK will be limited to the actions and decisions made by top management to overcome the pandemic-induced business challenges, more so those highlighted at the beginning of the current chapter. Therefore, top managers in various retailing SMEs in the United Kingdom will be interviewed to reveal the strategic decisions they made in response to the Covid-19 pandemic.

Research indicates a strong relationship between adaptive resilience and the SP of SMEs in the retail sector (Aidoo et al., 2021). Aidoo et al. (2021) used a sample of managers and owners of 249 Ghanian SMEs to investigate adaptive resilience influenced their performance during the Covid-19 pandemic. They discovered that adaptive resilience and SME performance were not directly related. Instead, they revealed that their relationship was significantly mediated by strategic renewal (Aidoo et al., 2021). Therefore, their findings imply that strategic renewal is related to both organisational performance and adaptive resilience. However, since they utilised evidence from an African economy, their findings are less relevant in the UK context. Aidoo et al.’s (2021) findings agreed with an earlier Indonesian study investigating the relationship between resilient leadership and organisational performance (Suryaningtyas et al., 2019).  Suryaningtyas et al. (2019) discovered a significant positive relationship between the two variables, concluding that there is a need to apply resilient leadership in strategic decision-making to impact organizational performance positively. However, Suryaningtyas et al. (2019) conducted a study on the hotel industry, whereby 38 hotels, guest houses, and resorts were surveyed in their study. However, regardless of their small sample size, the consistency between their findings and those of Aidoo et al. (2021) signals the validity and reliability of their study. Nevertheless, it is unclear if their findings can be generalised to SMEs operating in the retail sector and the UK context. Though, Zutshi et al. (2021) conducted a comprehensive review of the literature to investigate the kind of strategic responses UK SMEs undertook to build resilience to overcome pandemic-induced challenges. In this regard, the authors theoretically hinted at the possible relationship between resilience and strategic performance. Therefore, based on prior research findings, it can be hypothesised that the pre-existing retailing SMEs’ resilience levels determined their strategic performance during the Covid-19 pandemic. Therefore, the current study will determine the nature of the relationship between the two variables and qualitatively identify the specific ways retailing SMEs strategically responded to build resilience. At this point, it is also imperative to examine how strategic performance is measured, especially in the retail sector.

Further, although most studies have focused on the relationship between strategic performance and resilience, none utilised Oxfam’s resilience measurement tool. Therefore, it is also imperative to investigate the relationship between strategic performance with each dimension of Oxfam’s resilience measurement tool. First, in their study, Xu et al. (2013) discovered that customer demand directly impacted competitive strategy. In this regard, competition strategy was another name used to denote strategic performance, but in its pure sense, one can consider the concept as an outcome of strategic performance. Therefore, it can be said that customer demand provides a suitable environment for the successful implementation of competition strategies. However, it is also worth noting that Xu et al. (2013) utilised a sample of companies operating in the manufacturing industry, such as chemicals, computers, textile, and appliance industries. The findings can be relevant to the current study, especially when considering the intimate relationship between manufacturers and retailers. This observation is consistent with Karimi and Huatuco’s (2019, p.4) findings, whereby they argued that “Supply chain management plays a crucial role within apparel industry in terms of efficiency and effectiveness of producing and delivering product in the right place at the right time…the company needs to ensure that they make the right strategic decisions….” In the context of this quotation, the authors implied that customer demand determines the strategic performance of a company. In this regard, it can be argued that the reduction in customer demand during the Covid-19 pandemic due to reduced household viability implies that SMEs’ strategic performance was significantly hindered. Also, it is worth noting that prior research (e.g., Xu et al., 2013) has suggested that the relationship between strategic performance and household viability is unidirectional. In other words, customer demand influences strategic performance and not the vice versa.

Further, prior research has indirectly hinted at a significant correlation between innovation potential and strategic performance. For example, according to Chandrashekhar et al. (2017), the strategic performance of firms can predict the overall firm performance. On this line of thought, prior studies have demonstrated that the innovation potential of firms, directly and indirectly, affects their performance. For example, in their systematic review, Bach et al. (2019) discovered that innovation initiatives in private companies helped improve their overall performance. The main strength of Bach et al.’s (2019) study in the current study is that it utilised companies of various sizes, including SMEs, as long as they were private. Therefore, their findings can be generalised to the context of SMEs. In agreement with their conclusions, Kahn and Candi (2021) discovered that firm size and type of product or service offering moderated the relationship between innovation and overall firm performance. They notably demonstrated a nonlinear kind of moderation, which was inconsistent with prior research that firm size indicates a linear moderation in the relationship between the two variables. Regardless, the study (Kahn & Candi, 2013) demonstrated the indirect relationship between innovation and overall firm performance. Regarding a nonlinear relationship between innovation and firm performance, Kahn and Candi (2021) showed that pursuing exploration and exploitation innovation strategies seems beneficial for large companies, whereas pursuing the two types of innovation independently seems to be helpful for small businesses firms. Therefore, in the best of the researchers’ (Kahn and Candi, 2021) knowledge, there is no linear relationship between the two variables, which is inconsistent with prior research findings, as indicated in the discussion section of their paper. Therefore, the inconsistency observed in their study needs to be investigated further in future research. Even so, none of the two studies cited in this paragraph were based on the retail sector, meaning the findings should be applied cautiously in the context of the current study.

There is also a need to determine if access to government support and the availability of contingency resources influence the strategic performance of SMEs. In their study, Alkahtani et al. (2020) discovered that government financial support had a significant positive impact on the relationship between networking structure and sustainable competitive performance. In other words, government support had an indirect positive impact on the sustainable competitive performance of SMEs in Pakistan (Alkahtani et al., 2020). Alkahtani et al. (2020) used a sample size of more than 260 SMEs operating in various sectors of the economy, implying that their findings are valid, reliable, and generalisable. Despite the geographic and economic differences between the United Kingdom and Pakistan, Alkahtani et al.’s (2020) findings do imply that there is a possibility that government financial support affects the strategic performance of SMEs. However, it is also worth noting that this observation is based on similarities between strategic and competitive performance. In other words, competitive performance can be treated as an outcome of strategic performance. These observations are consistent with Anwar and Li’s (2020) findings that government financial and non-financial support significantly impacted Pakistani SMEs’ differentiation and cost leadership strategy, financial performance, and competitiveness. Anwar and Li (2020) utilised a mixed-methods research design with a large sample size of 360 managers/leaders of SMEs in Pakistan. Therefore, the findings of their study can also be labelled as valid, reliable, and generalisable to other SMEs in the United Kingdom despite the economic and geographic differences between the two countries. Also, it is worth noting that the study’s dependent variables (e.g., competitiveness and cost leadership strategy) are closely related to the construct of strategic performance, which means there is also a possibility that government support can help improve the strategic performance of SMEs. Even in their studies, both Alkahtani et al. (2020) and Anwar and Li (2020) indicated that they utilised a sample of SME managers/leaders because they are directly involved in strategic planning and decision-making. In agreement with their findings, another study by Chen et al. (2021) discovered that the government plays a significant role in the digital transformation of SMEs. Notably, the authors indicated that the successful digital transformation of an SME is a direct product of the strategic planning and decision-making of the top leadership and management (Chen et al., 2021). In other words, government financial and non-financial support can help SMEs to improve their strategic performance, which, in turn, enhances the speed at which they transform digitally. Therefore, although no study has directly investigated the relationship between government support/availability of contingency resources and strategic performance, it can be stated hypothetically that the relationship could be existing because government support has been demonstrated to be significantly correlated with other performance typologies, especially those linked to managers’ strategic planning and decision-making.

Finally, there could be a statistically significant relationship between strategic performance and SMEs’ social/institutional capability. Although Oxfam’s resilience measurement tool did not focus on strategic leadership while highlighting communities’ social and institutional capability, it can be argued that institutionally capable SMEs are those whose leaders can effectively manage their strategic performance. In their study, Hughes and Fuller (2013) argued that communities’ social and institutional capability entails access to preparedness information, perceptions of the effectiveness of local leadership, government engagement of communities when deriving solutions to uncertainties, and community preparedness awareness. In a recent study, Bai and Yan (2021) investigated the impact of firm social media capability on organisational performance. They discovered that organisational social media capability positively impacted firm performance; the management’s social media capability moderated the effect size of the association. Bai and Yan (2021) utilised evidence from Chinese firms; they mainly viewed social media as a marketing and customer engagement tool rather than a tool for accessing preparedness information, especially during the Covid-19 pandemic. In their comprehensive review of the literature, Merchant and Lurie (2020) discovered that social media platforms like Facebook, YouTube, WhatsApp, and Twitter became extremely handy in spreading preparedness information about the Covid-19 pandemic. The researchers were also not hesitant to point out the issue of deliberate misinformation on these platforms, which resulted in some degree of confusion among the public members on what source to trust (Merchant & Lurie, 2020). Therefore, by extrapolating Bai and Yan’s (2021) findings based on these observations, it can be argued that firm social media capability in the context of the Covid-19 pandemic entailed the ability of SMEs to distinguish trustworthy sources of preparedness information and misinformation. It enabled SMEs to prepare appropriately, resulting in their overall improved performance, which agrees with Bai and Yan’s (2021) findings in their study. Although Bai and Yan (2021) did not focus on the strategic performance of SMEs, it can also be argued with certainty that firm social media capability can help improve strategic performance; this claim is generally based on prior studies (e.g., Anser et al., 2020) that have demonstrated a statistically significant relationship between network capabilities and strategic performance. Anser et al. (2020) utilised a sample of 929 senior managers of firms operating in the textile industry to test the relationship between the two variables. In the literature review section of their study, Anser et al. (2020) had discovered that network capability initiates strategic business performance because networks provide access to valuable information, such as market dynamics and knowledge about innovation. Anser et al. (2020) added that firms need to be strategically flexible for improving their strategic performance through network capability. They discovered that strategic flexibility moderates the relationship between network capability and strategic performance. These findings were also consistent with another study (Majid et al., 2020) that discovered that strategic flexibility was a significant moderating variable in the relationship between network capability and strategic performance. Majid et al. (2020) defined network capability as “…the ability of the firm to create, develop and use its relationships (internal and external) to obtain access to required resources and make continuous improvement in performance indicators” (p.3). It is the exact definition that was provided by Anser et al. (2020). Majid et al. (2020) utilised a sample of 769 managers working in Pakistani SMEs in various sectors of the economy. Their study concluded that network capability improves SMEs’ strategic performance because it improves their ability to pursue change while at the same time remaining innovative. In this regard, it can be said that social and institutional capabilities, as viewed in Oxfam’s resilience measurement tool, improves a firm’s strategic performance. Therefore, SMEs with ready access to credible and trustworthy Covid-19 preparedness information were more likely to improve in their strategic performance, which, in turn, improved their resilience.

          2.4.1 Strategic Performance Measurement

According to Chandrashekhar et al. (2017), there are four elements of SPM, namely aligning strategic goals to day-to-day operations, testing and validation of strategic decisions, easier reporting and focusing on metrics that matter, and developing balanced scorecards for reporting. Chandrashekhar et al. (2017) offered an in-depth discussion of the various aspects of each of these elements, which can be used to form the various items of the current study’s data collection questionnaire. For example, they argued that developing balanced scorecards for reporting entails four aspects, namely (a) innovation/growth, (b) customer, (c) internal operations, and (d) financial (Chandrashekhar et al., 2017). In agreement, Micheli and Manzoni (2010) recommended the need to include both financial and non-financial indicators of strategic performance. They mainly argued that non-financial indicators have incremental but not superior information content to financial indicators. However, it is worth noting that Micheli and Manzoni’s (2010) approach was not robust enough as it failed to capture the other three elements of SPM, such as the alignment of strategic goals and objectives to day-to-day business operations. Instead, all the four elements highlighted by Chandrashekhar et al. (2017) agreed with an earlier theoretical review by Pinheiro de Lima et al. (2009). Pinheiro de Lima et al. (2009) highlighted the various roles of an SPM system, among them the financial and non-financial results and continuous improvement capabilities.  In this regard, Chandrashekhar et al.’s (2017) four dimensions will be used to construct a data collection instrument for the variable of strategic performance. The other two reviews (Micheli and Manzoni, 2010; Pinheiro de Lima et al., 2009) will enhance the constructed tool, which is further presented in the methodology section.

2.5 Summary and Gaps in the Literature

In summary, this chapter has provided an in-depth literature review of the challenges facing retailing SMEs in the United Kingdom during the pandemic and how their resilience and strategic performance could be measured. It was determined that SMEs were the most vulnerable to pandemic-induced disruptions. The literature review also focused on developing a robust resilience measurement tool for SMEs, whereby Oxfam’s tool and Westrum’s (2006) approach were combined to provide a robust approach to measuring resilience among retailing SMEs in the United Kingdom. A literature review of resilience-building among SMEs also revealed that the kind of strategic decisions that SMEs made in their response to the pandemic determined their resilience building. As a result, it was also imperative to review the literature on the relationship between resilience and strategic performance among SMEs. Evidence from other industries resulted in the hypothesis that there could be a strong positive relationship between resilience and strategic performance among retailing SMEs in the UK. The data collection instruments generated from the literature will be discussed further in the methodology section.

The primary research gap identified in the literature review is that no study has focused on how to improve resilience among retailing SMEs in the United Kingdom to overcome the pandemic-induced disruptions. Instead, most studies have focused on SMEs in other industries, making it challenging to generalise their findings to the retail sector due to significant operational differences. Besides, no single study has empirically measured the strategic performance of retailing SMEs in the United Kingdom. Most studies have also focused on SMEs in other sectors of the economy. Besides, most studies are either qualitative or reviews of the literature. Finally, despite the literature hinting that strategic performance is a critical determinant of overall organisational performance, most studies have only focused on financial parameters. The literature review findings indicated that non-financial parameters, such as customer relations, are also important because they are incremental information contents even though less critical compared to financial parameters. Therefore, it is imperative to develop a robust strategic performance measurement tool that considers financial and non-financial parameters. The next chapter presents the methodological approach of the current study.

 

CHAPTER 3: METHODOLOGY

3.1 Introduction

This chapter presents the methodological approach that was used in the current study. It justifies the research philosophy, the research approach, and the research approach. Afterwards, it presents the data collection methods and analysis and rationalises why they were deemed appropriate for the current study. Towards the end, the methodological limitations are highlighted with a brief discussion of why they could not be overcome. Finally, the ethical issues that were considered during the study will also be justified.

3.2 Research Philosophy

According to Saunders et al. (2019), there are five main philosophical underpinnings in business research: positivism, interpretivism, critical realism, pragmatism, and postmodernism. This section discusses each of them while identifying their advantages and disadvantages. Afterwards, it will be justified why pragmatism was deemed as the most appropriate for the current study.

          3.2.1 Positivism

Positivism is commonly used by natural scientists interested in the accurate observation of the social reality to derive law-like generalisations (Saunders et al., 2019). The philosophy is widely used in social sciences, whereby positivists aim to generate laws that can accurately be applied to human behaviour and social life (Mohajan, 2020). For example, in the context of the current study, a hypothesis examining the relationship between SME resilience and strategic performance can be tested by collecting quantitative data and running appropriate tests, such as correlational analysis or regression analysis. However, understanding the relationship between the two variables alone would contribute insignificantly to achieving the research goals and objectives covered in the first chapter of this report. Therefore, it can be said that the main limitation of relying on this philosophical stance is the fact that it limits the contribution of a research study in the derivation of action plans that can have a considerable impact on the external reality. However, its findings can still have notable contributions towards understanding a given phenomenon in a specific context. For example, the relationship between SME resilience and strategic performance is established in prior research, but the association has not been tested within the context of the Covid-19 pandemic. Based on the literature review findings, it can be said that the association might have been altered significantly, prompting the need for new empirical inquiry. Therefore, positivism was still relevant in the current study but could not be undertaken because it offers a limited focus that might not be much helpful in developing action plan recommendations for retailing SMEs in the United Kingdom.

          3.2.2 Interpretivism

According to Saunders et al. (2019), interpretivism can be considered the direct opposite of positivism because, whereas the former utilises a subjectivist research paradigm, the latter is inclined towards an objectivist research paradigm. Interpretivism emerged after positivism to criticise its stance that the outer reality can only be measured objectively and accurately. Instead, interpretivism argued that the human mind is independent of physical phenomena and constructs meanings differently (Saunders et al., 2019). For example, different people can perceive and understand the same reality differently despite having the same amount of exposure. Unlike positivism, interpretive research recognises the researchers’ participation in the research process as vital. This research philosophy is also relevant to the current research study, especially in addressing the second part of the research question that focuses on how SMEs’ resilience levels can be improved. However, like positivism, interpretivism also limits the scope of the current study. Therefore, it could have been appropriate if the resilience levels of retailing SMEs in the United Kingdom were already established in prior research.

          3.2.3 Critical realism

Critical realism evolved from the writings of Bhaskar (1975), who argued that human senses are subject to personalised experiences hence cannot be considered to be accurate representations of the outer world. However, critical realism avoids the extreme ends of interpretivism and positivism. Instead, the philosophy maintains that human senses, what people see and experience, can only act as a vehicle to study outer reality. In other words, human mental processes cannot be considered to be absolutely representative of outer reality (Saunders et al., 2019). Therefore, the external reality lives outside what people see and experience. Interestingly, critical realists often try to study the independent external reality, disagreeing with interpretivists who argue that there is no external reality as realities are solely constructed by peoples’ experiences and perceptions (Saunders et al., 2019). It also differs from positivism, which posits that what people see through objective measurements and scales are accurate representations of outer reality (Saunders et al., 2019). The primary approach undertaken by critical realists is by first relying on human experiences and then applying backward reasoning to study what might have caused humans to develop such experiences. Therefore, critical realism researchers often utilise retrospective data to investigate reality from a historical perspective, such as going backward to investigate the causes of specific human experiences. Hence, it was not appropriate for the current study because there is a considerable amount of literature on the economic downturn during the pandemic. As such, the present study’s scope does not require any retrospective data to investigate the resilience levels of retailing SMEs in the United Kingdom and how they associate with their strategic performance.

          3.2.4 Pragmatism

Instead, the current study utilised pragmatism as its philosophical stance. According to Saunders et al. (2019), pragmatists believe that the philosophical contention on how the outer world can be understood does not matter. Instead, they focus on bringing organisational improvement that is observable and measurable (Saunders et al., 2019). The philosophy posits that ideologies are only relevant when they prove actionable and promote positive change (Saunders et al., 2019). Therefore, pragmatists would not mind using any philosophical stance, both documented or not documented in the literature, as long as it supports action (Kaushik & Walsh, 2019). For example, the current study focuses on deriving ways of promoting resilience among retailing SMEs in the United Kingdom to support their strategic performance even during a crisis. It would have been inappropriate to lean on an extremist research philosophy that will only limit the extent to which the findings support activities that can bring the desired change. The following sub-section discusses the research approaches that were used in the present research.

3.3 Research Approach

According to Saunders et al. (2019), there are three approaches to theory development in business research: deduction, induction, and abduction. In this section, each of them is discussed. Finally, towards the end, it is justified why abduction was deemed as the most appropriate approach.

          3.3.1 Deduction

Deduction is the most dominant approach to theory development in natural sciences. It is most inclined towards positivism because it entails developing a theory and subsequently subjecting it to rigorous testing to determine its validity and applicability in explaining the behaviour of the external world (Saunders et al., 2019). It has also been used in social sciences and psychology to derive general laws of human behaviour. Such generalisations are then applied in management sciences, making them relevant to business research (Woiceshyn & Daellenbach, 2018). According to Creswell and Plano Clark (2017), a deductive approach “works from the ‘top down,’ from a theory to hypotheses to data to add to or contradict the theory” (p.23). Therefore, this approach would have been appropriate for the current study if its scope was solely testing the relationship between SME resilience and strategic performance. In such a case, the literature review findings would have informed a hypothesis concerning the relationship between the two variables, which would then be tested by collecting quantitative data from retailing SMEs in the United Kingdom. However, since the scope of the current study is beyond only investigating the relationship, it was deemed less appropriate.

          3.3.2 Induction

Induction is the direct opposite of deduction because it focuses on theory development as data are collected and analysed (Saunders et al., 2019). Therefore, the research approach is commonly used in interpretive research. The researcher is directly involved in the research process, particularly in interpreting human experiences as the absolute representative of the outer world. In contrast to deduction, Creswell and Plano Clark (2017) argued that an inductive approach is “bottom-up, using the participants’ views to build broader themes and generate a theory interconnecting the themes” (p.23). For example, in the current study, retailing SME owners in the United Kingdom will be interviewed to investigate the best ways such businesses can build resilience during crises, based on the managerial implications of the Covid-19 pandemic. The qualitative data will be analysed to derive themes, which will then be consolidated to form a practical framework for escaping the extreme negative consequences of the Covid-19 pandemic. In that regard, it can be said that an inductive approach is also partially relevant to the current study. However, it could also not accommodate the present research’s full scope, making it less appropriate for consideration.

          3.3.3 Abduction

Instead, abduction was preferred in the current study. Saunders et al. (2019) elaborated on abduction as follows: “Instead of moving from theory to data (as in deduction) or data to theory (as in induction), an abductive approach moves back and forth, in effect combining deduction and induction” (p.155). Indeed, as seen in subsections 3.3.1 and 3.3.2, deduction and induction were both relevant in the current study but only failed to accommodate the whole scope of the research. Instead, it was implied that combining them would have helped achieve the entire purpose of the current study by fulfilling its content. Since abduction is a combination of both, it was deemed the most appropriate of the three. Mitchell (2018) indicated that abduction is also commonly used alongside pragmatism, especially in mixed methods studies that address broader perspectives of the same reality. Finally, an abductive approach was undertaken to ensure that a superior research study addresses how retailing SMEs can boost and build their resilience in crises, not only in the Covid-19 pandemic but also in the future. The following sub-section discusses the research design.

3.4 Methodological Choice

There are three types of research methods: qualitative, quantitative, and mixed-methods. The nature of the research question determines the choice of a research method. Qualitative research refers to a methodological approach that utilises textual, visual, or audio data to answer research questions. No numerical data are used in such a study (Cassell & Symon, 2004). Examples of qualitative data include interviews, photographs, videos, and audio files. For instance, a researcher can use interviews to gather the interviewee’s real-life experiences to construct meaning to a given phenomenon (Cassell & Symon, 2004).  The main strategies of qualitative research include Case Study Analysis, Grounded Theory, and Humanistic Inquiry (Damgaard et al., 2001). These strategies are discussed further under research strategies.

On the other hand, a quantitative method is used by research studies that collect and analyse numerical data to answer a research question (Apuke, 2017). According to Saunders et al. (2019), quantitative research designs are commonly used in examining the relationship between variables. These variables are measured numerically and analysed using a wide range of statistical techniques. The presentation of findings can be tabular or graphical depending on the output and the amount of clarity needed to explain the findings. Therefore, a quantitative research design could also be relevant in the current study because it seeks to measure resilience levels among UK retailing SMEs and examine the relationship between resilience and strategic performance. In that regard, the two variables can be measured numerically. Their relationship can be analysed using statistical techniques like correlational analysis or t-tests, depending on the nature of the study. The main disadvantage of a quantitative research design is that meanings derived from numbers might be challenging to practically apply in a normative social setting (Saunders et al., 2019). Therefore, it was deemed less appropriate in deriving sense-making recommendations for retailing SMEs struggling due to the pandemic.  The commonly used research strategy in a quantitative choice, especially in business settings is a survey.

Instead, a mixed-methods research design was deemed as the most relevant for the current study. According to Schoonenboom and Johnson (2017), a mixed-methods research entails collecting, analysing, and interpreting qualitative and quantitative data in a single research study or a series of studies investigating the same underlying phenomenon. The main advantage of a mixed-methods research design is that combining qualitative and quantitative methods in a single study helps alleviate the weaknesses of one another, improving a study’s rigour, validity, and reliability (Saunders et al., 2019). Therefore, a mixed-methods study can be considered to be inherently triangulating data. Triangulation is associated with better research credibility because the analysis and interpretation of one data type help confirm the other type’s validity (Salkind, 2010). For example, in the current study, the relationship between retailing SMEs’ resilience and their strategic performance will help support the interpretation of interviewees’ recommendations on how struggling SMEs can build their resilience and evade disruptive events during and after the Covid-19 pandemic.

3.5 Research Strategy

          3.5.1 Case study

The qualitative part of the current study utilised a case study analysis. A case study analysis is commonly used when giving in-depth descriptions of a given phenomenon within a specific setting (Saunders et al., 2019). For example, a case study of a company or companies that successfully built resilience during the Covid-19 pandemic would involve an in-depth inquiry, requiring a multi-perspective approach. The current study can adopt a case study analysis to identify best practices that retailing SMEs in the UK adopted to evade the pandemic-induced disruptions in pursuit of developing sense-making recommendations for those still struggling. However, the current study did not entirely entail qualitative data only. Quantitative data were also collected to fulfill the aims and objectives fully. Some of the reasons a qualitative case study strategy could be adopted includes the holistic nature of the current study. For example, the Oxfam resilience measurement tool that was discussed in the literature review section is multi-perspective. Many issues were covered, ranging from technological adoption to knowledge sharing. Therefore, the purpose of the case study analysis was to offer real-world insights into these theoretical concepts. According to Saunders et al. (2019), a case study analysis entails studying the interaction between the subject of the case and its context. For example, the case in the current study would be retailing SMEs (population and sample are discussed later), and the context is the Covid-19 pandemic. Therefore, the case approach can facilitate understanding how retailing SMEs that successfully adapted to the pandemic managed the situation from the perspective of resilience building. Some of the advantages of case study analysis include being a practical solution when a large sample size cannot be obtained. However, it has been criticised of researcher subjectivity and external validity (Willis, 2014). Other qualitative research strategies that compete with a case study analysis included grounded theory. In the further justification of why a case study strategy was deemed the most appropriate for the qualitative part of the study, the grounded theory strategy is also highlighted below.

          3.5.2 Grounded theory

Further, grounded theory refers to a research study that aims to develop a theory through the collection and analysis of a set of qualitative data (Saunders et al., 2019). The theory is developed inductively to fill a knowledge gap. The developed theory can later, or in the same researcher study, be tested rigorously to determine its viability in explaining external events. This methodology was not adopted in the current study because theoretical development in SME resilience is sufficient, as discussed in the literature review section. Therefore, there was no need to develop a new theory but rather use existing theories to understand the experiences of SME owners in the UK during the Covid-19 pandemic. Also, a humanistic inquiry was deemed as less appropriate in the current study when compared with a case study approach. According to Hirschman (1986), a humanistic inquiry is a research study that investigates how people and societies live, think, interact, and express themselves. Therefore, a humanistic inquiry can be more appropriate for marketing research and organisational studies. The purpose of the current study does not support such a methodological approach. Overall, although a qualitative case study strategy was undertaken in the current study, it only addressed the research question partially. Therefore, it can be said that a qualitative method was not appropriate for the current study because it does not cover the whole scope of the research question. At this point, it is also imperative to discuss the research strategy used in the quantitative part of the study.

          3.5.3 Survey

In the quantitative part of the current research study, a survey strategy was used. According to Saunders et al. (2019), a survey strategy is commonly used in business and management research to answer “what” or “how much” questions. For example, in the current study, a survey was used to collect quantitative data whose analysis answered the following questions: “What were resilience levels of fashion retailing SMEs in the United Kingdom during the Covid-19 pandemic” and “What is the relationship between the resilience of fashion retailing SMEs in the UK and their strategic performance during a crisis.” However, it is worth noting that these questions are sub-components of the main research question. Other reasons for using a survey for the current study include objectivity, statistical representativeness, and the preciseness of results (Saunders et al., 2019).

3.5 Research Design

Further, a mixed-methods choice can be exploratory or explanatory depending on the sequence of data collection and analysis. For example, a research study that starts with the collection and analysis of qualitative data followed by the collection and analysis of quantitative data is called sequential exploratory (Saunders et al., 2019). Therefore, a sequential explanatory study begins with collecting and analysing quantitative data, followed by collecting and analysing qualitative data. A sequential exploratory study is preferred when developing a new treatment protocol, a research instrument, or taxonomy (Edmonds & Kennedy, 2017). Such studies are mostly undertaken when variables are not known, prompting the researcher to develop a theory (e.g., instrument, taxonomy, or treatment protocol) and then tests its rigour in the second phase (quantitative) (Edmonds & Kennedy, 2017). Therefore, since variables were derived from the literature review in Chapter 2, there was no need to develop a new theory in the current study, making an exploratory mixed-methods design less appropriate for the current study. On the other hand, a sequential explanatory research study is preferred when the researcher is interested in following up the quantitative findings to provide more ground for clarification and interpretation of findings (Edmonds & Kennedy, 2017). For example, a researcher might be interested in explaining the relationship between retailing SMEs’ resilience and their strategic performance by using qualitative data. However, such an approach is strictly guided by the nature of the study. For example, the nature of the current study is to investigate the resilience levels of retailing SMEs during the Covid-19 pandemic. The relationship sought between resilience and strategic performance is only intended to demonstrate that UK’s retailing SMEs are more likely to perform better strategically by building resilience during and after the pandemic. Therefore, there is no need to perform a follow-up to clarify and interpret the quantitative findings. Instead, the qualitative and quantitative parts of the study serve unique purposes towards answering the research question.

Therefore, a concurrent mixed-methods design was deemed as the most relevant for the current study. According to Saunders et al. (2019), a concurrent design is when qualitative and quantitative data are collected first and then analysed simultaneously. It is also called single-phase mixed methods because qualitative and quantitative methods are separately used within a single phase of data collection and analysis (Saunders et al., 2019). A concurrent mixed-methods design is preferred when initiating a social or organisational change by supporting various perspectives (Castro et al., 2010). For example, the recommendations will be used to initiate organisational change among SMEs still struggling. Therefore, a multi-perspective lens is needed to formulate and rationalise change.  As such, the current study entailed collecting both qualitative and quantitative data first before analysing them.

Additionally, another important issue considered in mixed-methods designs is integrating the qualitative and quantitative findings. According to Guetterman et al. (2015), qualitative and quantitative findings can be integrated at the analytic or interpretation level. At the analytic level, the qualitative and quantitative data are analysed as a single set and displayed jointly. At the interpretation level, qualitative and quantitative data are analysed separately and then integrated when discussing the findings in light of the research objectives and addressing the research question (Guetterman et al., 2015). In the current study, the qualitative and quantitative findings were integrated at the interpretation level because of the nature of the research question. It is also worth noting that regardless of the level of results integration, there are four ways of integrating qualitative and quantitative data, namely building upon quantitative findings in an explanatory design or building upon qualitative results, as is the case in an exploratory design (Guetterman et al., 2015). However, in a concurrent design, quantitative and qualitative findings can be merged or embedded within one another. In the current study, the quantitative method was embedded within the qualitative method because it sought to justify the change proposals derived from qualitative data analysis. For example, suppose the qualitative findings suggest that technological innovation helped them escape the pandemic-induced disruptions. In that case, the findings of the quantitative part will be used to rationalise the finding, adding that by adopting the proposed changes, retailing SMEs are going to record significant improvements in their strategic performance and overall organisational performance. In that case, it could have been inappropriate to treat the qualitative and quantitative data as equal, yet the quantitative part was inherently less significant than the findings of the qualitative case study analysis. The next sub-section discusses the methods of data collection and analysis used.

3.5 Data Collection

          3.5.1 Population and sampling

Before defining the specific methods used in data collection and analysis, it is imperative to present the population and sample size used in the current study. According to Banerjee and Chaudhury (2010), a research population refers to the group or groups the researcher wants to draw conclusions about. For example, the primary focus of the current study has been retailing SMEs in the United Kingdom. However, the retail sector is diverse, ranging from fashion to groceries. Therefore, it is also imperative to specify the type of retailing SMEs the current study intends to investigate. According to the International Trade Centre (2020), the textile and clothing industry was the most affected as governments ordered industries to shut down manufacturing operations to curb the spread of the Covid-19 virus. Therefore, whereas grocery retail shops remained resilient, as highlighted in the literature review, some sections of retailing SMEs still struggle. They directly depend on textile manufacturing activities to manage their supply chains. Consequently, it is imperative to focus on the fashion industry to fulfil the aims and objectives of the current study. In other words, the population of the current study was fashion retailing SMEs in the United Kingdom.

A sample of fashion retailing SMEs was obtained using convenience sampling. Convenience sampling is a non-probability type used when the researcher recruits only the participants reachable (Saunders et al., 2019). Many factors can motivate researchers to prefer this sampling technique. In the current study, due to resource constraints and the challenges posed by the Covid-19 pandemic, it was impossible to obtain a random sample of fashion retailing SMEs in the United Kingdom. Random sampling requires much physical engagement, going against the social distancing restrictions. However, statisticians argue that probability sampling techniques, such as random sampling, can improve a study’s reliability and validity, especially if statistical inferences are needed (Saunders et al., 2019). However, others argue that a convenience sample can be used in a correlational study like the present research to understand the relationship between variables (McMillan, 2011). Therefore, equally, the convenience sample used in the current study can credibly and validly demonstrate the relationship between resilience and strategic performance. Also, it is worth noting that convenience sampling was used for both the qualitative and quantitative parts of the current study.

          3.5.1.1 Sample size and recruitment of interviewees

The participants were owners of fashion retailing SMEs operating in Glasgow, UK. First, the main inclusion criterion was that they must have owned the fashion retail store before the onset of the Covid-19 pandemic. Second, they must have also continued their operations amid the pandemic despite government restrictions, such as curfews and lockdowns. Third, they must not have laid down their staff as a response strategy to the pandemic. Fourth, the retail store must have recorded an improvement in sales volume during the pandemic. Fifth, the retail store must have recorded an improvement in the number of customers during the pandemic period. A positive increase in customer traffic and sales volume implies that customer conversion rates kept improving despite the changes in customer behaviour during the pandemic, as highlighted in the literature review section (e.g., Ratten, 2020). Sixth, the order value and the size of an average shopping cart must have also improved during the pandemic. It was deemed that these criteria comprised the most important parameters of improved performance amid the pandemic-induced disruptions. Only performing fashion retailing SMEs were chosen to guarantee that the information obtained from the participants can help inform ways in which those SMEs still struggling can optimise their resilience and boost their performance during and after the Covid-19 pandemic.

The recruitment of the participants was the most challenging part of the study. Due to the ongoing Covid-19 pandemic, it was not advisable to conduct face-to-face interviews. Therefore, Internet-mediated interviewing was preferred in the current study. However, since it was difficult to find fashion retailers operating in Glasgow online, the best strategy included distributing physical recruitment flyers while observing social distancing (Roberts et al., 2021). Contact information (email and phone/WhatsApp number) was provided on the flyers, whereby potential participants willing to participate in the study were advised to contact the researcher. Luckily, a total of 16 potential participants reached out to the researcher. The recruitment process was completed through a chat app (e.g., WhatsApp), email, or phone call. As highlighted later in this chapter, seven people who reached out met the inclusion criteria and were qualified to proceed to the main interviewing process while considering ethical considerations. Each interview took approximately 30-45 minutes.

          3.5.1.2 Sample size and recruitment of survey participants

As explained later in this chapter, a correlational analysis was performed to investigate the relationship between the two variables (resilience and strategic performance). Since the population of fashion retailing SMEs in Glasgow is undocumented in official reports, it was challenging to calculate the sample size based on the population size. Rather, calculating the sample size was based on the requirements of performing a correlational analysis using the guideline provided by Bujang and Baharum (2016). The authors highlighted how to use the desired correlation coefficient, statistical power, and type 1 error to calculate the sample size. In the formula, the authors included baseline correlation (R0) (correlation coefficient at null hypothesis), alternative correlation (R1) (correlation coefficient at alternative hypothesis, power, and alpha. In the current study, the desired R0 was 0.0, and R1 was 0.5 at a statistical power of 80% and alpha = .05. Using these values, the sample size was determined as 29 subjects to produce minimal statistically valid and reliable findings (Bujang & Baharum, 2016).

The quantitative part of the study was also recruited in a similar way to the interviewees. First, all the sixteen potential participants who replied as willing to participate in the interviews were also requested to fill out the questionnaires. Additionally, another set of physical flyers were supplied to fashion retailers at Glasgow while observing social distancing and mask-wearing, inviting them to participate in the questionnaire. A total of 50 flyers were supplied, attracting a 48% response rate. In that regard, a total of 24 participants reached out using the contact information provided. Also, out of the 16 potential participants initially invited for interviews, nine were willing to participate. Therefore, 33 participants took part in the survey, which was supplied through email or WhatsApp using a web link generated using Google Forms. There were no strict criteria in taking part in the quantitative part of the study, as the participants were only required to be owners of fashion retailing SMEs with less than 250 employees.

          3.5.2 Qualitative data collection

Semi-structured interviews were used to collect qualitative data for the case study analysis. Saunders et al. (2019) defined an interview as “…a purposeful conversation between two or more people, during which the interviewer asks concise and unambiguous questions and listens attentively to the interviewee talking” (p.434). Interviews can be structured, semi-structured, or unstructured. A structured interview comprises a set of standardised questions in a questionnaire format. The researcher reads the questions to the reader without any modification or even follow-up questions (Saunders et al., 2019). Structured interviews are less commonly used in qualitative research because they lack the flexibility to explore important or emerging issues during the interviewing process. Since case studies require in-depth exploration of the phenomenon of interest, structured interviews were not used in the current study. On the other hand, unstructured interviews are informal because questions are not written beforehand but rather emerge during the interview process (Saunders et al., 2019). Therefore, since the dimensions of SME resilience were identified during the literature review, unstructured interviews were regarded as the least suitable for the current study.

Instead, semi-structured interviews qualified as the most suitable technique to collect qualitative data to answer the research question. Prewritten questions guide a semi-structured interview, but the researcher still has the flexibility to ask additional questions or even seek clarifications on critical issues to the research question (Saunders et al., 2019). Therefore, the prewritten questions serve as a rough guide to the interview process. The interview guide (Appendix A) was developed based on the modification and integration of Oxfam’s resilience dimension and Westrum’s (2006) resilience measurement model. As a result, a total of 15 questions were formulated for the interview guide. During the actual interviewing process, follow-up questions were posed to clarify on issues that emerged.

          3.5.3 Quantitative data collection

Closed-ended questionnaires were used to collect quantitative data. The questionnaire was constructed by modifying and integrating the relevant dimensions of Oxfam’s resilience measurement instrument and Westrum’s (2006) resilience model. During the literature, relevant and irrelevant dimensions to the retailing sector were identified. The relevant ones were then picked and used to formulate the closed-ended questionnaire, which comprised a 5-point Likert scale (Strongly Agree – Strongly Disagree). The resilience measurement tool developed for the current study contained 15 items. The instrument developed in the current study was named Oxfam-Westrum Modified Resilience Measurement Tool (OW-m-RMT). The tool’s minimum score is 15 points and the maximum score is 75 points. However, it is also worth noting that sub-scoring for each dimension (e.g., innovation potential) was also undertaken to allow the measuring of resilience levels of SMEs at a dimensional level.

On the other hand, strategic performance was measured using a tool developed from scratch by using Chandrashekhar et al.’s (2017) four dimensions. Each dimension had 1-4 items. The final tool had a total of 8 items. The tool was also attached alongside OW-m-RMT, which were processed using Google Forms. The instrument was also scored on a 5-point Likert scale (Strongly Agree – Strongly Disagree). The tool’s minimum score is 8, and the maximum score is 40.

3.6 Data Analysis

          3.6.1 Qualitative data analysis

The qualitative interviews were analysed using Nowell et al.’s (2017) guideline on a credible and trustworthy thematic analysis (TA). After conducting all seven interviews, the next step involved transcribing them verbatim into textual data to allow for a TA. While strictly observing ethical guidelines on handling participant data, the next step entailed familiarising with the data before moving to the second TA step. According to Nowell et al. (2017), after familiarising with the data, the researcher should start by generating the initial codes from the data. The initial codes were developed based on the theoretical guideline derived in the literature review, which also guided the formulation of the resilience measurement tool used in the current study. In other words, the integration of Oxfam’s resilience measurement tool and Westrum’s (2006) resilience model by extracting relevant dimensions in the context of retailing SMEs provided the theoretical framework for the TA. The third step entailed searching for themes by combining and collating closely related thematic codes. The fourth step entailed reviewing the themes to ensure consistency between them and the thematic codes. At this stage, irrelevant thematic codes were dropped, and relevant ones not previously included were added to respective themes. The final step entailed defining and naming the themes based on the meanings they constructed in the context of the qualitative data and thematic codes assigned to them.

          3.6.2 Quantitative data analysis

First, the business information at the beginning of the questionnaires was analysed descriptively. The information includes the size of the business (e.g., the number of employees) and revenue generated in the past financial year. Visual graphs will accompany the descriptive statistics to demonstrate the characteristics of the fashion retailing SMEs surveyed in the current study.

On the other hand, the relationship between SMEs’ resilience and their strategic performance will be analysed using a correlational approach. A correlational analysis is suitably used when investigating the relationship between two or more variables (Curtis et al., 2016). The main advantage of a correlational study is that it can provide inferential conclusions between two variables in their naturalistic setting because none is subjected to any form of manipulation. Besides, the correlation coefficient can hint at the effect size of the causal relationship between two variables. For example, in the current study, it is hypothesised that the resilience levels of SMEs can predict their strategic performance. Therefore, the correlation coefficient helped demonstrate the extent to which resilience predicted the strategic performance of fashion retailing SMEs in the United Kingdom during the Covid-19 pandemic.

3.7 Ethical Considerations

Since human subjects were used in the current study, numerous ethical concerns were considered. First, ethical approval was sought from a local research ethics committee. Although there was no comprehensive system to monitor if the research ethics were considered after the permission was given, all the ethical concerns of research utilising human subjects were considered. The first step involved developing a comprehensive participant information sheet containing details about the study and how it will be conducted. Such information included how to process a withdrawal from the study after participation, who to contact in case of harm, the likely harm to be encountered in the research process and how it would be mitigated, how their responses will be handled, and all the rights of the participant in undertaking the study. The participant information sheet was emailed to the potential participants two days before supplying the questionnaires and conducting the interviews to give them adequate time to understand the information provided therein. At the beginning of the questionnaires processed by Google Forms, the participants were asked whether they understood the information sheet and consented to participate based on the information provided therein. The consent fields were mandatory for participants to fill before filling and submitting the questionnaire. If the participants did not consent, they were not allowed to submit the questionnaire.

Participants were provided with the consent form at the beginning of the interview and were requested to consent before participating. Participants were assured that any private and confidential information about their businesses (e.g., business name, brands, and location) would not be shared with any third party. Instead, the information will be destroyed immediately after the study is completed. The data were stored in a password-protected computer and discarded (permanent deletion) immediately after the research study. The personal information of the participants was not collected during data collection.

3.8 Methodological Limitations

The main strength of the current study is data triangulation, evident in utilising both qualitative and quantitative data to answer the same research question. Even so, confounding factors in the relationship between resilience and strategic performance were not assessed and moderated in the current study. According to Salkind (2010), confounding factors extraneously manipulate the relationship between two variables. For example, in the present study, it is possible that a third variable, which is not assessed in the current study, is responsible for the apparent their apparent association. However, the qualitative data will help mitigate any misleading nature of these confounding factors, if any.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER 4: FINDINGS AND ANALYSIS

4.1 Introduction

This chapter is divided into two main sub-sections: quantitative and qualitative findings. The quantitative sub-section presents descriptive statistics and the findings of the correlational analysis. The qualitative sub-section presents the thematic analysis findings. The results are briefly interpreted in each sub-section before integrating them, comparing and contrasting them in light of the literature review in the discussion chapter.

4.2 Quantitative Findings

          4.2.1 Pearson’s correlation assumptions

When performing a correlational analysis, some assumptions must be considered to guarantee findings are valid and reliable. The first assumption is that data must be normally distributed. The current study tested normality using the Shapiro-Wilk test, which was performed using SPSS v.20. The findings revealed that the significance for resilience and strategic performance was .414 and .182, indicating that the data were normally distributed since the significance value for each variable was above .05. Table 1 below presents these findings.

Table 1: Shapiro-Wilk Test Results

	Shapiro-Wilk
	Statistic	Df	Sig.
Resilience	.967	33	.414
Strategic Performance	.955	33	.182

 

Other assumptions of a correlational analysis include linearity and homoscedasticity. Linearity pertains to the premise that data follows a linear relationship. For example, the relationship between resilience and strategic performance must demonstrate linearity to be considered fit for a correlational analysis. On the other hand, homoscedasticity pertains to the assumption that data can disperse. Linearity and homoscedasticity were examined using a scatter plot. As shown in Figure 1 below, the data followed a linear relationship, and data points were equally distributed to both sides of the scatter plot. Therefore, the dataset used in the current study met the two assumptions, making it closer to qualifying for an accurate and reliable correlational analysis.  

Figure 1: A scatter plot of resilience (x axis) versus strategic performance (y axis). The graph was generated using Microsoft Excel (2016).

Finally, other assumptions of a correlational analysis include the utilisation of continuous variables, paired observations, and the absence of outliers. Both resilience and strategic performance were continuous variables because they were measured using standardised data collection instruments. Also, strategic performance and resilience were paired observations. In other words, each participant filled both measurement instruments during the data collection phase of this study. During data analysis, resilience and strategic performance were treated as paired observations for each participant. Finally, the absence of outliers was determined by using the inter-quantile range (IQR) approach. Concerning resilience, the first quartile (Q1) was 30, and the third quartile (Q3) was 45; therefore, IQR was 15. When detecting outliers in such a dataset, the following formula is used: any value higher than {(IQR X 1.5) + Q3} and any value lower than {Q1 – (IQR X 1.5)} would be considered an outlier. In that regard, the upper and lower limits for identifying outliers were 67.5 and 7.5, respectively. In the dataset, there was no value larger than 67.5 and more bass than 7.5, meaning no outlier was present in the variable of resilience. Instead, the highest value was 53, and the lowest value was 18. Concerning the variable of strategic performance, Q1 was 21 and Q3 was 30; hence, IQR was 9. Using the same formula applied above, the upper and lower limits for identifying outliers were 43.5 and 7.5. In the current dataset, the highest value was 35 and the lowest value was 12, meaning there were no outlier. Overall, all the assumptions of Pearson’s correlational analysis were successfully met in the current study. The next sub-section presents the findings of the internal reliability of the modified data collection instruments.

          4.2.2 Internal reliability

The research proposal highlighted that a pilot study would be conducted to investigate the internal reliability of the modified versions of the two data collection instruments. In the current study, internal reliability was assessed using Cronbach’s alpha (α) coefficient. The pilot study’s findings revealed α = .86 for Oxfam’s Modified Resilience Measurement Tool, which is considered acceptable. In the main study, internal reliability assessment revealed an excellent α of .92 for the Modified Resilience Measurement Tool (Table 2). Therefore, participants similarly interpreted the questions, pointing to the increased validity and reliability of the findings.

Table 1: Internal Reliability for Oxfam’s Modified Resilience Measurement Tool (SPSS Output).

Cronbach’s Alpha	Cronbach’s Alpha Based on Standardized Items	N of Items
.922	.921	15

 

On the other hand, the reliability analysis of the pilot data revealed that the Strategic Performance Measurement Tool had internal reliability of α = .81. In the main study, the scale had internal reliability of α = .89 (Table 3), an excellent and acceptable one. The consistency between the pilot study and the main research implies that the participants interpreted the survey questions consistently, hinting out at the current study’s increased reliability and validity.

Table 2: Internal Reliability for Strategic Performance Measurement Tool (SPSS Output)

Cronbach’s Alpha	Cronbach’s Alpha Based on Standardized Items	N of Items
.892	.888	8

 

          4.2.3 Descriptive statistics

Table 4 below presents the descriptive statistics for fashion retailing SMEs’ resilience during the Covid-19 pandemic. The 33 SMEs surveyed in the current study had a mean of 36.70 out of 75 maximum possible points in the resilience measurement tool. In that regard, it can be said that their resilience levels were slightly above the average, which can be considered relatively inadequate for a developed economy like the United Kingdom. However, based on this information alone, it is challenging to conclude whether the Covid-19 pandemic significantly reduced their resilience levels or not. Though this conclusion can be reached by analysing individual survey questions, such as those focusing on the household viability levels under the influence of the Covid-19 pandemic. However, before focusing on particular questions, it is recommendable to start with the four main dimensions of Oxfam’s resilience measurement tool measured in the current study.

Table 4: Descriptive statistics for SMEs’ resilience (SPSS Output)

	N	Range	Mean	Std. Deviation	Variance
Resilience	33	35	36.70	8.626	74.405
Valid N (listwise)	33

 

The first dimension of the resilience measurement tool was household viability, which comprised two items (2 minimum points and 10 maximum points). As shown in Table 5 below, the average score of this dimension was 3.94 (SD = 1.12), which is far below average. In the survey, the questions of this dimension mainly focused on the demand for clothing items during the Covid-19 pandemic and sales volume. If the score is converted into a percentage, fashion retailing SMEs in the United Kingdom could score 39.4%. Therefore, it can be said that a significant reduction in household viability during the Covid-19 pandemic, as reflected in the considerable decrease in sales volume due to a demand decrease, threatened the resilience of these businesses.

The second dimension of the data collection instrument, innovation potential, had six items (6 minimum points and 30 maximum points). As shown in Table 5 below, the average score was 16.15 (SD = 3.53). In this regard, in terms of innovation, the 33 surveyed fashion retailing SMEs scored slightly above the average (53.83%), which can still be considered relatively low for a developed country like the United Kingdom. Since the questions under this dimension were diverse, it is imperative to dissect them further to determine the specific aspects of innovation potential that contributed the most to their innovation potential. The first question focused on the businesses’ prior preparedness to handle a disruptive event of such magnitude. On a scale of 1-5 (strongly agree – strongly disagree), the 33 surveyed SMEs scored an average of 2.2, meaning a majority of them disagreed that they were not adequately prepared to handle a disruptive event of the Covid-19 pandemic magnitude, further exposing the vulnerability of SMEs when a crisis like the pandemic occurs. The second question focused on knowledge sharing as a way of finding innovative solutions to tackle the pandemic. On the same 5-point Likert scale, the 33 surveyed SMEs scored an average of 3.3, implying that a majority could neither agree nor disagree, meaning a considerable degree of knowledge sharing was executed during the pandemic to develop innovative solutions. The third question focused on employee preparedness to tackle the pandemic challenges. The surveyed companies scored an average of 2.7, meaning a majority of the participants neither agreed nor disagreed, hinting that most employees of most companies were prepared to a certain degree nearing the average level. The fourth question of the survey focused on how technology could have become handy to solving the pandemic challenges facing SMEs, whereby the average score was 3.1, implying that an above-average degree of technology utilisation was evident in most companies. The fifth survey item focused on access to market information, whereby the average score was 2.5, which means the pandemic might have considerably impacted how these SMEs accessed market information. Finally, the survey’s last question concerning the second dimension focused on businesses’ risk-taking ability. The average score was 2.5, meaning a considerable number of companies could take risks despite the pandemic. At this point, it can be said that all the aspects of innovation potential, apart from prior preparedness, contributed averagely to the SMEs’ innovation potential. Therefore, it can be concluded that if fashion retailing SMEs were prepared before the onset of the pandemic, they would have remained resilient to the pandemic. Even so, the other aspects also need to be improved as they just scored above average.

Table 5: Descriptive Statistics for the Individual Dimensions of Oxfam’s Resilience Measurement Tool (SPSS Output)

	N	Mean	Std. Deviation	Variance
Household Viability	33	3.94	1.116	1.246
Innovation Potential	33	16.15	3.528	12.445
Contingency Resources and Support Access	33	6.94	1.767	3.121
Social and Institutional Capability	33	9.67	3.379	11.417
Valid N (listwise)	33

 

Further, the third dimension of the resilience measurement tool was contingency resources and support, which comprised three items (3 minimum points and 15 maximum points). As shown in Table 5 above, the average score for the surveyed SMEs was 6.94 (SD = 1.77). Therefore, it can be said that the SMEs scored below average (46.27%) on this dimension, implying that a majority of them did not have adequate access to support access and contingency resources. Also, it is imperative to examine the specific items and determine the particular root cause of this problem so that problem-focused solutions can be proposed towards the end of this dissertation. The first item under this dimension entailed access to government support during the pandemic; on a 5-point Likert scale, the average score was 2.2, which means approximately 44% of those surveyed managed to access government support. However, this estimation should be treated cautiously because a Likert scale does not provide any hint on the quantities or numbers in a given population but rather the participants’ perceptions. The second item of the scale focused on social connectivity and group participation in facilitating access to government support programmes. The average score on this item was 2.1, meaning most of the companies surveyed did not depend on social connectivity and group participation to access government support. In that regard, it can be said that the Covid-19 pandemic restricted group participation and social connectivity due to government movement restrictions, which, in turn, had a direct impact on how SMEs accessed government support programmes. Therefore, there is a close connection between these two items. Finally, the third item of this dimension focused on SMEs’ savings to tackle the pandemic challenges. The average score for the surveyed companies was 2.6, which implies that about half of the companies surveyed had enough savings to handle the pandemic. Still, the score can be considered relatively low for a developed country like the United Kingdom. Overall, regarding this dimension, it can be concluded that most SMEs in the fashion industry were unable to access government support programmes due to reduced group participation and social connectivity, which, arguably, reduced information and knowledge sharing on how to access such programmes. Therefore, most companies were forced to rely on their savings even when they generated reduced income due to decreased demand and sales volume.

Finally, the fourth dimension of the resilience measurement tool, social and institutional capability, had four items (minimum score of 4 and maximum score of 20). As shown in Table 5 above, the average score on this dimension was 9.67, which translates to 48.35%. The score can be considered relatively low for a developed country like the United Kingdom. Therefore, it can be said that the Covid-19 pandemic considerably threatened the social and institutional capability of fashion retailing SMEs in the United Kingdom. It is also imperative to investigate how the surveyed businesses scored in each item of this dimension to identify the root problem towards developing problem-focused solutions towards the end of this report. The first item of this dimension focused on preparedness awareness of the SMEs to tackle the Covid-19 challenges. The average score on this item was 2.8, meaning a considerable number of the surveyed SMEs knew how to prepare to tackle the challenges induced by the Covid-19 pandemic. However, considering the United Kingdom is a developed nation, much improvement is needed to boost SMEs’ social and institutional capacities. The second item under this dimension focused on whether SMEs were engaged by the government when developing a Covid-19 pandemic strategy for SMEs. The average score on this dimension was 1.8, which means the government never committed most companies surveyed to draft Covid-19 pandemic strategies for SMEs. In that regard, it is possible that most SMEs’ grievances were not captured in the plan, implying its reduced effectiveness. The third item focused on access to Covid-19 preparedness information. The average score on this item was 2.6, which means a good number of the surveyed companies might have accessed Covid-19 preparedness information, but considering the United Kingdom is a developed country, much improvement is needed on this aspect to boost SMEs’ social and institutional capability during a crisis like the Covid-19 pandemic. The final item focused on how SMEs perceived the effectiveness of their local leadership and institutions in handling the Covid-19-related challenges. The average score was 2.4, which means a considerable number of the surveyed SMEs believed that local leadership and institutions were less effective in finding solutions to the pandemic-induced challenges that faced them. In that regard, it can be said that there is a need to improve the institutional and social capability of SMEs to enable them to tackle crisis challenges more effectively. All the four aspects of this dimension measured in the current study need to be worked on, particularly the UK Government, since most of them are beyond the internal capacity of businesses.

Overall, the descriptive statistics of the resilience measurement tool suggest that the Covid-19 pandemic had a significant impact on the ability of fashion retailing SMEs to build resilience. Simultaneously, it can be said that the pandemic decreased the resilience of the SMEs because most businesses that had savings to tackle the pandemic ran out of cash at some point due to the prolonged crisis. Therefore, it is also imperative to analyse data on how the pandemic might have influenced the strategic performance of the businesses.

As shown in Table 6 below, the strategic performance mean was 24.97 (SD =5.9) out of the 40 maximum points possible for the scale used, which is approximately 62% when converted into a percentage. In that case, it can be said that the surveyed businesses scored above average concerning strategic performance, which is notably much better than their resilience. Although there is no pre-Covid data to determine if the pandemic had a significant impact on strategic performance, it can be argued with considerable certainty that the effect of the pandemic was more profound on resilience than strategic performance. Also, it is imperative to dissect this variable by looking at the individual items of the data collection instrument to identify the aspects of strategic performance that might have been affected the most by the pandemic.

Table 6: Descriptive Statistics for Strategic Performance (SPSS Output)

	N	Mean	Std. Deviation	Variance
Strategic Performance	33	24.97	5.924	35.093
Valid N (listwise)	33

 

The first item of the strategic performance data collection instrument focused on whether businesses’ strategic goals and objectives were aligned with their day-to-day operations. In that regard, the item focused on assessing whether companies stayed focused on moving in the right direction despite the Covid-19 pandemic. Mainly, moving in the right direction means that businesses could trust people responsible for their daily operations and had a clearer sense of what they needed to do at a given time. The item was scored on a five-point Likert scale, which means the maximum possible score was 5. The mean score on this item for the surveyed businesses was 3.0, which means most could neither agree nor disagree. Hence, it can be argued that a considerable number of companies managed to exercise strategic alignment effectively, which means the pandemic did not significantly sway them from their focus to move in the right direction despite the disruptive challenges. However, this conclusion would have been more assertive if pre-Covid data were available for comparison. It can also be said that a considerable number of other businesses did not manage to exercise strategic alignment effectively because the pandemic probably affected how they trusted people and how they could operationally remain focused in moving in the right direction. The qualitative findings will help reveal further the type of effect (e.g., positive or negative) the pandemic had on the strategic alignment of fashion retailing businesses in the United Kingdom during the Covid-19 pandemic.

The second item of the data collection instrument focused on whether SMEs relied on their financial performance to make trade-offs between competing objectives during the Covid-19 pandemic. Mainly, this item focused on whether the financial performance was an essential consideration in their business plan, particularly in decision-making. Measured in a five-point Likert scale, the average score on this item was 4.1, which means more than 82% of the surveyed businesses used this parameter in their planning. Before providing any conclusive remarks on this finding, it is imperative to acknowledge that it is a positive idea for companies to rely on their financial performance when executing corporate plans. However, the high score in the current study is unexpected, considering the relatively low score on other items of this instrument plus the items of resilience data collection instrument. The primary explanation for this occurrence could be that the pandemic had the most significant impact on the financial performance of businesses. This observation can be affirmed by the item of resilience data collection instrument that focused on SME savings. As a result, most companies were most vigilant on their finances than any other aspect of strategic performance. However, this claim would have been more assertive if pre-Covid data indicated that fashion retailing SMEs were less likely to use their financial performance as a parameter in making trade-offs between competing objectives. Instead, the current study’s qualitative findings would help provide a more precise and more assertive conclusion regarding this observation.

The third item of the data collection instrument focused on whether fashion retailing SMEs relied on customer traffic to make trade-offs between competing objectives during the Covid-19 pandemic. Customer traffic referred to the number of customers visiting physical or digital (online stores) to buy clothing and other fashion products. Although the number of customers (traffic) does not directly translate to sales volume, it was identified as a significant factor to consider in organisational strategic planning. The item was also scored on a five-point Likert scale. The average score was 2.6, which means approximately 52% of the companies used this parameter in their strategic planning if converted into a percentage. The difference between this score and that of the second item for the surveyed companies further affirms the observations made in the previous paragraph. At the same time, it can be argued that the SMEs scored relatively poor on this dimension because customer traffic, considering the closure of businesses due to pandemic movement restrictions, should have been treated as an essential deliberation. Therefore, it can be argued that it was one of the sources of the overall average score on strategic performance. Simultaneously, it can be argued that the SMEs over-relied on financial performance to make trade-offs between competing objectives, which skewed their strategic planning, probably making it less effective.

The fourth dimension of the data collection instrument focused on whether companies relied on their internal business operations during the Covid-19 pandemic to make trade-offs between competing objectives. This aspect was deemed relevant for the current study because the Covid-19 pandemic affected how businesses operated physically, such as the closing down of businesses, social distancing, staff working from home, and several other pandemic-induced changes. The item was also scored on a five-point Likert scale, whereby the average score was 3.5, which translates to most surveyed SMEs agreeing to the statement. In other words, approximately 70% of surveyed businesses relied on this parameter in their strategic planning. Based on the observations drawn from the average score on the second item of the data collection instrument, it was also anticipated that companies would score high on this aspect because, besides financial performance, the pandemic also had a significant and considerable impact on how businesses operated. For example, in the first few months of the pandemic’s onset, most companies were forced to shut down their physical stores and operate in other means (e.g., going online) that complied with the government’s directives. Therefore, regardless of the strategic knowledge of business owners and personnel, making such changes was mandatory. However, it is hard to determine whether these SMEs have the habit even before the onset of the pandemic due to a lack of pre-Covid data. Such an observation would have helped to determine if the pandemic induced SMEs to act more strategically or not. However, the correlation between resilience and strategic performance will expose this issue partially, considering that the pandemic had an apparent negative impact on the SMEs’ resilience.

The fifth dimension of the data collection instrument focused on whether companies relied on their innovation potential to trade-off between competing objectives. In the qualitative findings section, ways in which these SMEs measured their innovation potential will be provided. Also, innovation potential was deemed a relevant aspect for strategic performance because, besides being proposed in the literature, the Covid-19 pandemic forced most SMEs to operate from home, prompting most to adopt eCommerce solutions. The item was also scored on a 5-point Likert scale, whereby the average score for the surveyed companies was 2.8, which means 56% of them used their innovation potential in their strategic planning. Even so, it can be said that although a considerable number relied on innovation potential in their strategic planning, several other companies did not, despite innovation being regarded as one of the ways companies would have responded to the pandemic effectively. Therefore, the finding affirms that many SMEs were vulnerable to the disruptive events induced by the pandemic due to a lack of know-how on adequate preparedness to tackle the pandemic.

The sixth item of the data collection instrument focused on whether fashion retailing SMEs streamlined their organisational reports to focus on the performance metrics that matter. Since the pandemic did not directly influence this aspect (unlike financial performance and internal business operations), it has been a big test of the technical and strategic know-how of retailing SME owners and personnel in the United Kingdom. However, this claim is not the fundamental reason the aspect was included in the data collection instrument. Instead, focusing on the metrics that matter in handling the pandemic was essential, considering the enormous negative impact of the pandemic within a short period. The item was scored on a five-point Likert scale, whereby the average score was 3.1, which means that about 62% of the surveyed businesses relied on this aspect in their strategic planning. Therefore, although this score can be considered relatively decent for SMEs, what matters the most is the accuracy of the metrics on which they focused. The methodology of choosing the metrics that matter was also essential in this case. Hence, at this stage, it cannot be fully concluded that a considerable number of SMEs had the technical know-how of choosing the metrics. Instead, they were conscious of the need to change metrics to focus on what could help them survive the disruptive nature of the pandemic. Therefore, the qualitative findings of the current study will help provide more insights into their specific methodologies of choosing metrics that matter during the pandemic and how they handled them to ensure they survive.

The seventh item focused on whether the companies made their streamlined organisational reports available across business units and supporting functional areas. This aspect was deemed relevant for the current study because strategic planning is an inclusive approach whereby all organisation members should be engaged. It also ensures that all stakeholders develop a clearer sense of the organisation’s strategic direction, helping them to remain focused. Therefore, like the sixth item, the findings on the seventh item were a big test on their strategic and technical know-how on tackling the organisational disruptions induced by the pandemic. The item was also scored on a 5-point Likert scale, whereby the average score of the surveyed companies was 3.1, which correlates significantly with the findings on the sixth item. Hence, it can also be argued that most of the surveyed companies shared the streamlined organisational reports to all stakeholders. The primary intention behind their approach is mainly unseen because of the descriptive nature of the quantitative data. Therefore, it cannot be concluded with certainty that most of the surveyed companies had technical and strategic know-how on handling the Covid-19 pandemic. Besides, the lack of pre-Covid data on this aspect makes it even more challenging to argue with certainty because it is possible that the pandemic naturally forced companies to respond so, which was never the case before its onset. However, the findings of the qualitative data analysis will offer some insights into this issue.

Finally, the eighth item of the data collection instrument focused on fashion retailing SMEs tested and validated any organisational changes and strategic decisions during the pandemic before committing to them. This item/aspect was included in the data collection instrument to determine if companies had the technical know-how on choosing the most effective strategic options only in tackling the pandemic. The item was scored on a five-point Likert scale. The average score was 2.6, implying that about 52% of the surveyed companies tested and validated changes and strategic decisions before committing to them. Therefore, it can be assumed that companies that did so were also more likely to survive the pandemic than those that did not. However, what matters the most in this regard is the accuracy of their methodologies in testing and validating the choices. At this point, it is impossible to determine the accuracy of the methods. However, the qualitative findings will help in elaborating on the specific approaches used. Even so, 52% can be considered relatively low, which could be another factor that negatively influenced the strategic performance of fashion retailing SMEs in the United Kingdom.

Overall, the strategic performance of fashion retailing SMEs in the United Kingdom during the Covid-19 pandemic can be considered a bit better than their resilience. However, much still needs to be done to improve the performance even more. For example, very few surveyed businesses tested and validated their strategic decisions before committing to them. Many others did not rely on customer metrics and their innovation potential to make trade-offs on competing objectives. Having been identified as the areas of weakness, the current study will make recommendations directly to improve these aspects of strategic performance. At this point, it is also imperative to find out if the pandemic might have affected strategic performance by negatively influencing the resilience of SMEs.

          4.2.4 Inferential statistics

Pearson’s correlation coefficient was used to determine the relationship between strategic performance and SME’s resilience during the Covid-19 pandemic. A strong correlation between the two variables was discovered (r = .98; p = .00; CI = 95%), as shown in Table 7 below. In that case, it can be argued that the resilience levels of the SMEs influenced their strategic performance significantly. However, it is also possible that the relationship between the variables is bidirectional, considering that as one variable increased, the other also increased. In that regard, if the resilience of the companies was negatively affected by the Covid-19 pandemic, the impact might have spread out indirectly to strategic performance, especially for those aspects that seemed not to be directly affected by the disruptive events induced by the pandemic (e.g., focusing on metrics matter and testing and validating of strategic decisions before their adoption). Therefore, it is also imperative to determine how resilience might have correlated with each aspect of strategic performance. However, such an approach might be criticised for lacking methodological rigour because an individual item might not solely represent the element it represents in the outer world. For example, one may argue that testing and validating strategic decisions before committing to them could be a multidimensional aspect that needs rigorous data collection before it can be correlated with other variables like resilience. However, the current study’s findings can help offer a rough guideline on what the situation might have been like. Recommendations for future research will focus on the inherent weakness of this approach. In the current study, the approach is only used to offer confirmation to some of the observations made under descriptive statistics.

Table 7: Correlation between Resilience and Strategic Performance (SPSS Output)

		Resilience	Strategic Performance
Resilience	Pearson Correlation	1	.978**
	Sig. (2-tailed)		.000
	N	33	33
Strategic Performance	Pearson Correlation	.978**	1
	Sig. (2-tailed)	.000
	N	33	33
**. Correlation is significant at the 0.01 level (2-tailed).

 

As shown in Table 8 below, all the individual items of strategic performance were significantly positively correlated with SMEs’ resilience. Therefore, it can be said that the impact of the Covid-19 pandemic on the resilience of SMEs might have indirectly spread to their strategic performance through each aspect/item. However, suppose the correlation coefficients are to be considered valid and reliable at CI = 95%. In that case, it can then be argued that the impact of the Covid-19 pandemic on strategic performance via resilience might have penetrated the most via the decision to focus on performance metrics that matter (Q6) (r = .84; p = .00). From that perspective, based on the assumption that the relationship between resilience and strategic performance is bidirectional, it can be said that focusing on performance metrics that matter to tackle the pandemic was one of the most effective ways of building resilience during the Covid-19 pandemic. In that order, other significant aspects include strategic alignment (Q1) (r = .79; p = .00), innovation potential (Q5) (r = .79; p = .00), testing and validating strategic decisions (Q8) (r = .72; p = .00), internal business operations (Q4) (r = .70; p = .00), customer metrics (Q3) (r = .70; p = .00), financial performance (Q2) (r = .50; p = .00), and finally, availability of streamlined organisational reports to all critical stakeholders (Q7) (r = .50; p = .00). However, from the standard interpretation of a correlation coefficient, it can be argued that the correlation between resilience and all the eight items of strategic performance was strong (high degree), meaning each item significantly matters in the strategic decision-making and in promoting the resilience of retailing SMEs during a pandemic. However, it is imperative to confirm these observations in future research based on the recommendations provided in the concluding chapter of the current study.

Table 8: Correlation between Resilience and the Individual Aspects of Strategic Performance

 

		Resilience
Q1	Pearson Correlation	.786**
	Sig. (2-tailed)	.000
	N	33
Q2	Pearson Correlation	.500**
	Sig. (2-tailed)	.003
	N	33
Q3	Pearson Correlation	.695**
	Sig. (2-tailed)	.000
	N	33
Q4	Pearson Correlation	.703**
	Sig. (2-tailed)	.000
	N	33
Q5	Pearson Correlation	.782**
	Sig. (2-tailed)	.000
	N	33
Q6	Pearson Correlation	.841**
	Sig. (2-tailed)	.000
	N	33
Q7	Pearson Correlation	.498**
	Sig. (2-tailed)	.003
	N	33
Q8	Pearson Correlation	.716**
	Sig. (2-tailed)	.000
	N	33
Resilience	Pearson Correlation	1
	Sig. (2-tailed)
	N	33

 

Finally, based on the assumption that the relationship between resilience and strategic performance was bidirectional, it is also imperative to investigate how overall strategic performance correlated with each of the four dimensions of the resilience measurement tool. As shown in Table 9 below, innovation potential had the second-strongest correlation with strategic performance (r = .91; p = .00), meaning it could have been the second most significant determinant of strategic performance of retailing SMEs in the UK during the Covid-19 pandemic. Since some of the items of strategic performance were interpreted as the tests for the strategic and technical know-how of fashion retailing SMEs in the United Kingdom during the pandemic, it can be said that it was expected that innovation potential would be the greatest contributor. In other words, companies that have higher innovation potential are also likely to have owners and personnel with other critical skills that can help boost their strategic performance. However, it was not expected that social and institutional capability would be the strongest contributor to the SMEs’ strategic performance because most of the items of strategic performance focused on the technical/strategic know-how of the SME owners and their personnel. As shown in Table 9 below, social and institutional capability exhibited the strongest correlation (r = .93; p = .00). Although the relationship is not directly palpable, it can be said that government support entailed helping businesses strategise during the pandemic. However, such an observation should be treated as tentative until confirmed further using the qualitative findings. Participants were asked to highlight some of the ways the government supported them in overcoming the Covid-19 pandemic. Contingency resources and support access emerged as the third strongest determinant of strategic performance (r = .84; p = .00), which was expected based on the observation that government support might have helped SMEs develop effective strategies to tackle the pandemic. In that regard, access to that support and contingency resources must be significant contributors due to their direct interlinkage with social and institutional capabilities. Finally, household viability was also expected to be the least contributor to strategic performance (r = .53; p = .00) because no direct relationship can be established between them. These findings are analysed further in the discussion chapter of the dissertation.

Table 9: Correlation between Strategic Performance and the four dimensions of Oxfam’s Resilience Measurement Tool

 

		Strategic Performance
Household Viability	Pearson Correlation	.529**
	Sig. (2-tailed)	.002
	N	33
Innovation Potential	Pearson Correlation	.908**
	Sig. (2-tailed)	.000
	N	33
Contingency Resources and Support Access	Pearson Correlation	.824**
	Sig. (2-tailed)	.000
	N	33
Social and Institutional Capability	Pearson Correlation	.927**
	Sig. (2-tailed)	.000
	N	33
Strategic Performance	Pearson Correlation	1
	Sig. (2-tailed)
	N	33

 

4.3 Qualitative Findings

Seven semi-structured interviews were conducted. The interview audio files were transcribed verbatim into textual data. Each interview lasted between 30 and 45 minutes. Table 10 presents the background information of the businesses and business owners interviewed (pseudonyms were used to guarantee the confidentiality and privacy of the interviews.  Transcribed interviews were shared with individual participants to affirm if they were correctly processed. Afterwards, the researcher performed the thematic analysis iteratively. Seven themes emerged from the analysis: (a) supply chain disruption, (b) the significance of technology, (c) consumer behaviour, (d) Covid-19 impact on workforce, (e) demand for clothing products, (f) the role of government support, and (g) social connectivity. Each theme is presented below.

Table 10: Business and business owner characteristics

Business Name /Business Owner	Business Characteristics
Business A (Female owner, 37 years old)	Business A was established four years ago in Glasgow, UK. It deals with contemporary womenswear of diverse materials and designs. The retail majors in local brands, but it also imports international brands like Religion and Pinko to add to its luxury portfolio. Regardless of the type (e.g., coats, trousers, knitwear, etc.), the average price per product is £299. In 2020, the company sold an average of 40 pieces a day, a significant drop from 62 pieces a day before the onset of the pandemic. The company developed an eCommerce website during the Covid-19 pandemic, but it still experiences marketing challenges. The website currently has a traffic of 0 visitors each day, meaning it is entirely in its infancy. The store had four employees as per the time of the interview.
Business B (Male owner, 43 years old).	Business B has been in operation since 1983 (38 years). It operates as an independent fashion Boutique in Glasgow, UK. The company deals with local and international brands, primarily outsourced from other European countries, such as Italy (Paris and Milan). The owner did not reveal the average price per product and sales volume in 2020 for confidentiality reasons upon request. The company deals with womenswear only, and it is among the oldest fashion boutiques in Glasgow. It operated an eCommerce website that collapsed in 2017 and was never revived during the Covid-19 pandemic. Business B had 6 employees at the time of the interview.
Business C (Male owner, 62 years old).	Business C was established in Glasgow, UK, 33 years ago and has remained in operation, selling second-hand clothes and old fashions starting from the 1940s onwards. It sells both women- and menswear but specialises in vintage-like designs. The company majorly focused on social media advertising during the Covid-19 pandemic. It has never operated an eCommerce platform. During the time of the interview, the owners were winding up the business to sell the final products and close it permanently before they go to retire. The company had 5 employees at the time of the interview.
Business D (Male owner, 49 years old)	Business D also operates at the centre of Glasgow since 2001 (10 years). It specialises in women’s fashion products. It deals with European brands, both domestic and international (mainly from Italy). Its marketing edge is luxurious and durable clothing products for women. The company relied heavily on Facebook and Instagram to market its products during the Covid-19 pandemic. It had seven employees during the time of the interview.
Business E (Male owner, 34 years old)	Business E was the most prominent fashion store utilised in the qualitative part of the study. It majors in thousands of fashion brands both within Europe and abroad. It deals with men, women, and children’s clothing and accessories, including belts and footwear. It has a famous eCommerce store and delivers in various parts of the United Kingdom, mainly in Scotland. The eCommerce store has remained operational since 2003; the business itself was established in 1994. It had 12 employees at the time of the interview.
Business F (Female owner, 56 years old)	Business F is somehow different from other businesses because it majors in eyeglasses, cosmetics, headwear, and wig services. The business was established in 2008 to deal with luxurious hair and cosmetic products for high-end customers. At the time of the interview, the company relied on its non-eCommerce website and social media platforms to market its products. It had eight employees at the time of the interview.
Business G (Male owner, 44 years old)	Business G deals with menswear, focusing on a specific fashion niche, mainly footwear, accessories, spray paints, and gadgets. Established in 2005, the company also majored into eCommerce in 2012. Since then, the eCommerce store has grown tremendously, with the growth being accelerated during the Covid-19 pandemic. At the time of the interview, it had six employees.

 

In summary, all the seven businesses whose owners were interviewed had less than 20 employees, qualifying them as small businesses in the United Kingdom. Most of the companies had operated in the fashion retailing industry for than ten years, implying their experience in providing rich information about factors that influenced their resilience during the pandemic. Three of the businesses had well established eCommerce stores, with two of them having more than 3,000 website visitors each day. Only one of the businesses relied on a private website and social media to advertise their products. The remaining three businesses exclusively relied on social media to advertise their products. Therefore, it can also be said that the interviewees provided rich information on the technological and innovation challenges that faced the companies during the Covid-19 pandemic. The seven themes that emerged are presented below.

          4.3.1 Supply chain disruption

Five of the seven interviewees highlighted that they experienced significant supply chain disruptions during the pandemic that threatened the immediate closure of their businesses. The commonly cited reason behind this challenge was their reliance on international brands to promote their competitive advantage. Table 11 below demonstrates the coding process.

Table 11: Coding process “supply chain disruption”

Thematic Code	Interview Extract
Major delays in the delivery of goods	“My supplier ran unavailable because garments were deferred from abroad…”
	“Most luxury clothes sought after were not accessible from my provider due to shut ports and postponed conveyances…”
	“We’ve generally depended on Just in Time conveyance method of supply, yet things looked exceptionally changed this time… a great deal of delays and our clients’ #1 pieces vanishing altogether from the market.”
Reduced demand perspective	“When we were told to close our shops in 2020, I dropped my orders with my supplier…”
	“I had to set a cut-off date by which I would accept completed orders…I cancelled many orders I placed before Covid because many suppliers were unable to meet my cut-off date…”
Strengthening relationships with suppliers.	“We went through a lot in 2020 and didn’t want to repeat in 2021…so we focused on being more agile by ensuring better relationships with existing vendors.”
	“We preferred to place orders in smaller volumes so that we don’t lose our present suppliers…”
	“We preferred agility and flexibility in our business…”

 

The particular issues raised concerning supply chain disruption include delays in the delivery of garments, reduced demand for goods, and strengthening supplier-retailer relationships. Regarding the delays in the delivery of goods, the participants highlighted various issues. First, when the first participant (P1) was asked to discuss how the pandemic affected sales, he pointed out that delays in the delivery of garments, especially those shipped from abroad, were a significant concern. All the seven participants (interviewees) highlighted that they rely on suppliers, who, in turn, import the garments from textile companies in other countries like China. For example, P1 said, “…our supplier depends on the Asian Region Network of textile industries to ship garments to Scotland….” The retailers place orders with the suppliers before shipping the garments, but retailers pay upon the delivery of their orders. When various governments enforced international travel restrictions, the clothing industry was the most affected because of the sophisticated shipping networks, which are mostly done by all three modes of transport (i.e., air, land, and water) to meet the local demand of the products. For example, in the United Kingdom, China was on the red list of high-risk countries, which locked down all forms of international flights between the two countries. As a result, the supply chain in the textile and clothing industries was severely affected. For example, P5, the owner of Business E, said, “…my supplier sources a large portion of the clothing pieces from China… during the lockdown things were halted until I needed to close my business for some time …” Therefore, it can be argued that whereas other SMEs in the retail sector remained more resilient to the disruptive events of the pandemic, the fashion industry, especially in the SME sector, was more severely affected due to the reasons further highlighted below.

The main reason the fashion retailing industry in the SME sector was among those severely affected by the pandemic include reduced demand for clothing products as many shops were shut down due to lockdowns and nationwide curfews. While elaborating on the issue of delayed delivery of goods, P4 said as follows: “We’ve generally depended on Just in Time conveyance method of supply, yet things looked exceptionally changed this time….” In this regard, the participant highlighted that before the onset of the pandemic, the demand for clothing products in the United Kingdom was high, needing Just-In-Time delivery. Therefore, it can be said that the pandemic resulted in a significant reduction in demand, which also contributed directly to supply chain disruption. This claim is supported by the participants who indicated that they were forced to drop their orders placed before the Covid-19 pandemic because they closed down their physical stores. As indicated in Table 11 above, P7, who owns Business G, argued that he had to set a cut-off date for suppliers, after which he dropped off several orders. He said, “…my supplier was unable to deliver within the cut-off dates so I had to cancel several orders…” In this regard, it can be said that the impact was more severe on the supplier side, including their employees, because they had to incur unwanted costs besides the reduction in demand for clothing products. Additionally, P2 reported that they were urged by their union associations not to cancel orders and place reasonable cut-off dates because such moves would have harshly affected the suppliers and their employees. However, the participant further stated that despite such calls, their businesses were also incurring unprecedented costs due to lockdowns and curfews, forcing them to cancel their orders. Noticeably, the call to postpone the cancelling of orders perhaps worked for large businesses that were more resilient to the pandemic.

Further, the participants of the study highlighted some of the mitigations they undertook to minimise the negative impact of supply chain disruptions on their businesses. The rampant cancelling of orders could have directly resulted in most retailers losing contact with their suppliers. Consequently, they could have been forced to look for other suppliers after the opening of the economy who may not be specialising in their clothing brands or a specific type of garments. Therefore, the retailers had to derive strategies to maintain long-term relationships with their suppliers. For example, one of the participants, P3, highlighted that they learned in 2020 the significance of promoting the agility of their businesses to boost their resilience from the perspective of supply chain disruption. He said, “We preferred agility and flexibility in our business….” On the same note, P6 added that “…we focused on being more agile by ensuring better relationships with existing vendors.” At this point, it was also imperative to inquire further on the specific strategies they employed to maintain lasting relationships with their suppliers. P4 said, “We preferred to place orders in smaller volumes so that we don’t lose our present suppliers…” In this case, placing smaller volumes reduced the rates at which they cancelled orders, guaranteeing a long-term relationship with their suppliers. However, one may need to understand how reducing the cancelling of orders ensured improved supplier-retailer relationships. When this issue was inquired in a follow-up question, P7 said, “…cancelling of orders would have forced our suppliers to exit their businesses permanently….” As highlighted earlier, P2 argued that their union associations urged them not to cancel orders because it affected suppliers and their employees. In other words, suppliers would have made huge losses, resulting in the permanent closure of their businesses. Consequently, retailers could have been forced to find other suppliers, which could have affected their brands negatively by losing their current customers.

          4.3.2 Digital technologies

Technology was one of the central themes in the analysis of qualitative findings. The participants reiterated that garments were generally regarded as non-essential during the Covid-19 pandemic. Hence, their demand reduced significantly. As a result, brick-and-mortar stores suffered more considerably than online stores, especially among SMEs operating in the retail fashion industry. Table 12 below summarises the coding process for this theme.

Table 12: Coding Process for “The Significance of Technology”

 

 

Thematic Code	Interview Extract
Demand perspectives	“…technology helped bridge some demand gaps we experienced during Covid…”
	“…online orders picked August last year and kept growing in 2021…”
	“…people significantly limited physical interactions and demand for online orders increased during the pandemic…”
	“…our online store reached record-breaking high since we opened it in 2012…”
Digital adoption	“…we invested in increasing our capability and capacity…digital was the way to go…”
	“…when our customers were asked to shop from home…the first question that came to our minds is how to embed digital into our business…”
	“…we relied on social media to connect with our customers during the lockdowns and curfews…”
Effectiveness of technology	“…we still hope to return soon to normalcy because us going online has not been enough…”
	“…although our ecommerce store played a central during the pandemic, we still needed a lot of funds to reach a considerable number of consumers to trust our brand…”
	“…we still had to combine our ecommerce site with instore sales to avoid losses…”
	“Some of our customers said they’ve never shopped garments online before…”
Merchandise distribution	“…if the customer was within town, we delivered the order…”
	“…we had some cases of click and collect but we mostly delivered to the customer…”
Marketing perspectives	“…timely and relevant online advertisements worked for us…”
	“…we redoubled our marketing efforts to reach more customers…”
	“…we relied on industry reports to inform our digital marketing decisions and strategies…”

 

Through the help of follow-up questions, the various ways in which digital technologies worked for some of the retailers were explored. The first sub-theme emerged from concerned demand perspectives. Three out of the seven participants highlighted some of the ways technology helped them mitigate the reduction in demand for clothing products. For example, P3 said, “…technology helped bridge some demand gaps we experienced during Covid…” In the context of the quotation, the participant was explaining how digital technologies facilitated their businesses during the pandemic. In this regard, the participant indicates that the Covid-19 pandemic resulted in demand reduction for clothing apparel, but the use of an eCommerce platform combined with well-informed marketing strategies helped them to overcome this demand gap. When the participant was inquired further to explain the mechanism behind this approach, he argued that the government advised consumers to stay at home. Therefore, even with stores open, most customers could not be engaged and convinced to buy new arrivals in the market. Hence, digital technologies provided the media to engage customers, allow them to place orders online, and so on. Another participant, P5, who also owns Business E that also runs an eCommerce platform, said, “…online orders picked August last year and kept growing in 2021….” In this regard, the participant affirmed P3’s statement, adding that the demand for clothing products resumed when they built their eCommerce capacity and capability through increased marketing as explained later in this chapter. Overall, the participants argued that although non-essential clothing products’ demand reduced considerably during the pandemic as people withheld their savings, many consumers were still interested in new arrivals and brands. Due to lockdowns, curfews, social distancing, and movement restrictions, many physical stores were shut down. Even when they were open, most people still could not access them, resulting in a demand surge for online shopping platforms.

The second sub-theme that emerged concerns the factors that encouraged SME owners to adopt digital technologies during the pandemic. P4 said that “…we invested in increasing our capability and capacity….” In the context of this quotation, the participant implicitly implied that digital technologies helped them to build and sustain their resilience during the pandemic. For example, the participant mentions “capability” to refer to their ability to navigate through the disruptive events of the Covid-19 pandemic. In terms of capacity, the participant referred to the need to operate in a new environment efficiently and effectively. P7 added, “…when our customers were asked to shop from home…the first question that came to our minds is how to embed digital into our business…” In this regard, the participant notes that their business spotted digital technologies as the first solution to the disruption caused by the Covid-19 pandemic. Through a follow-up question, the participant was inquired to explain if they considered competing solutions when the government asked consumers to shop from home. In his response, he indicated the main challenge they experienced was on deciding the specific technology to adopt, but digital technologies were the overall solution they identified without any alternatives. However, the participant maintained that their eCommerce platform was established in 2012 but since then it had been receiving low traffic due to meagre efforts to market it. However, it is also worth noting that participants adopted different technological solutions. For example, one of the participants, P2, the owner of Business B indicated that they stopped paying for the resources of their eCommerce website back in 2017 and they never revived it during the Covid-19 pandemic because “…we knew growing an online business is certainly not something simple to do and can’t have transient returns as many may think ….” Instead, “…we relied on social media to connect with our customers during the lockdowns and curfews….” When the participant was asked to explain why they preferred social media to an independent eCommerce platform, he said that their business had already made losses in the first few months into the pandemic. They had little savings to set up and market an eCommerce platform to yield adequate returns to pay their employees and cater up for their fixed monthly fees. Hence, relying on social media was cheaper and required little to no technical know-how to run it. However, the most important issue at this point was the effectiveness of the technologies the various businesses used during the pandemic.

Further, another sub-theme that emerged from the analysis of the interviews under the theme of the significance of digital technologies concerns the effectiveness of the technologies the businesses adopted. Four participants reported that they were dissatisfied with the effectiveness of the technologies, whereas others reported satisfaction. Notably, most of the participants that reported dissatisfaction with the effectiveness of the technologies mostly relied on social media platforms like Instagram and Facebook to advertise their products. For example, one of the participants, P4, the owner of Business D, said, “…we still hope to return soon to normalcy because us going online has not been enough….” Through follow-up questions, the participants were asked to explain some of the challenges they encountered while advertising on social media platforms. He indicated that although many people reached out to inquire about their products, few of them trusted the legitimacy of their business. As a result, they experienced low conversion rates. On the other hand, although conversion rates might have been relatively higher for companies with eCommerce platforms, they experienced several other challenges that hindered them from fully realising the potential of the technology. For example, P1 said, “…although our eCommerce store played a central during the pandemic, we still needed a lot of funds to reach a considerable number of consumers to trust our brand….” In this regard, the participant affirmed P4’s claim that marketing an eCommerce platform to yield considerable returns could be challenging, especially considering the negative impact the pandemic had already had on the retailing SMEs. P5, the owner of Business E supported this observation when he added that they had to combine their eCommerce platform with in-store sales to avoid making losses. In other words, the participant implied that eCommerce alone was not enough to generate income to pay employees and incur other fixed expenses simply because they needed to spend a certain period marketing it to reach its maximum potential. Another reason the participants highlighted that eCommerce alone was never could be because most people were shopping online for the first time, which means businesses had not captured the needs of most customers. As such, digital marketing campaigns were less effective despite being costly.

One of the businesses (owned by P7) experienced tremendous growth during the Covid-19 pandemic by tapping customers lost by other businesses. The SME had operated a successful eCommerce platform, which was established in 2012. Before the onset of the pandemic, the company combined online and in-store sales. The participant said, “…our eCommerce site has been key to our business even before the pandemic…” Therefore, the platform was already well established when the pandemic disrupted normal business activities, giving them an added advantage to gain customers from the businesses that went online for the first time. When the participant was interrogated to elaborate more on some of the strategies they employed to grow and expand their eCommerce platform, he said, “…timely and relevant online advertisements work[ed] for us…” In this regard, the participant demonstrated that understanding customer needs was key to boosting the effectiveness of their digital marketing campaigns. However, since most people were shopping online for the first time, it was challenging for most businesses to rely on conventional digital marketing strategies. Instead, since their business could not study consumer behaviour, they relied on industry reports to inform their marketing decisions and strategies. P7 further said, “…we redoubled our marketing efforts to reach more customers….” Additionally, it can be argued that the company had enough savings to double its marketing efforts and ensuring their campaigns were effective. Therefore, it can be said that companies that had prior digital presence were more resilient than those that attempted it for the first time.

Finally, it was also imperative to interrogate the participants some of the ways they utilised the technologies to make sales. P7 said, “…we had some cases of click and collect, but we mostly delivered to the customer….” Click and collect is when the customer places an order online and then collects it by him- or herself from the merchant’s store. This method was used by few customers because a considerable number of them were conscious of the Covid-19 pandemic and hence complied with movement restrictions. Most of the orders were delivered by retailers, but the cost of transportation was incurred by the customer. Overall, digital technologies helped some SMEs to develop and sustain resilience during the Covid-19 pandemic. However, the rates of success for SME businesses in the retail industry that adopted digital technologies were significantly low compared due to the challenges highlighted under this theme.

          4.3.3 Consumer behaviour

As highlighted under 4.3.3, some businesses’ digital marketing strategies were probably less effective because most people were shopping online for the first time. Hence, most businesses did not understand their needs, making it challenging to run timely and relevant advertisements. As such, it was also imperative to investigate how consumer behaviour shifted. The findings can help SMEs still struggling to make informed marketing decisions and strategies, eventually facilitating the effectiveness of their advertisements. Table 13 below highlights the coding process for this theme.

Table 13: The Coding Process for “Consumer Behaviour”

Thematic Code	Interview Extract
Shopping behaviour	“…most of our customers placed their orders online during the pandemic…
	“…dresses and jumpsuits and accessories remained on demand but we lost sales for jackets, jeans, and trousers…”
	“…we didn’t encounter expanded interest for online deals for our beauty and cosmetic items… the vast majority actually visited our store of course …”
	“…we didn’t expect many of our customers to try new brands when our old supplier was out of business…”
Convenience	“…I observed that most customers were contacting us on even obvious things like placing items on the digital cart…”
	“…consumers bought products with more and genuine reviews on our site…”
	“…our customers preferred to shop with us because their orders could be delivered home…”
Durable and environmentally sustainable of garments	“…most customers were interested in durable products that could easily be repaired…”
	“…shoppers had an elevated consideration on raw materials used to make garments …”

 

Five out of the seven participants highlighted that their consumers exhibited a considerably different shopping behaviour during the Covid-19 pandemic compared to before the onset of the pandemic. The first and obvious one is the shifting from in-store shopping to online shopping. As stated earlier, this behaviour change is directly attributed to movement restrictions, social distancing, Covid-19 public awareness, lockdowns, and curfews. However, there are other changes to shopping behaviours that indirectly emerged from the Covid-19 pandemic. For example, the demand for dresses, jumpsuits, and accessories like handbags increased, whereas the demand for jeans, jackets, and trousers decreased. In this regard, there is no evident explanation for this shift in shopping behaviour since the interviews were conducted from the SME owners’ perspective, meaning future research should find out the explanation behind this shift from a consumer perspective. Another surprising shift in consumer behaviour was the fact that most customers tried new brands at a higher rate than before the pandemic. For example, P7 said, “…we didn’t expect many of our customers to try new brands when our old supplier was out of business….” In the context of this statement, the participant highlighted how their business lost contact with one of their suppliers after closing business permanently. Business G operates an eCommerce platform, which is one of those that succeeded amongst those studied in the current research. Therefore, it is possible that the many customers that tried to shop online for the first time during the Covid-19 pandemic were probably loyal to certain brands elsewhere, hence making it sound like a surprise for the fashion retailers. Therefore, future research to validate P7’s argument that customers tried different brands by interviewing/surveying consumers rather than business owners. Finally, as most of other businesses in the fashion retail industry went online for the first time due to a shift of shopping demand, cosmetics businesses remained profitable through in-store sales. For example, P6, the owner of Business F, said, “…we didn’t encounter expanded interest for online deals for our beauty and cosmetic items… the vast majority actually visited our store of course …” However, the business owner also did not highlight some of the reasons for this trend, prompting the need to interview/survey consumers of cosmetic and beauty products to find out the underlying mechanism in this trend.

As indicated in the previous paragraph, the customers’ shopping behaviour shifted significantly from in-store to online. As such, follow-up questions were used to investigate why most customers might have preferred online shopping apart from the obvious direct impact of curfews, movement restrictions, and lockdowns. The most cited reason in this regard was convenience. Customers would have preferred other means of shopping, such as order and collect if online shopping did not offer unmatched convenience. P7 said, “…I observed that most customers were contacting us on even obvious things like placing items on the digital cart….” This participant made the above statement while elaborating how customers enjoyed the communication convenience offered by online shopping platforms with an automated live chat system. In this regard, it can be argued that customers develop the confidence of placing an order when they have the convenience of talking directly to a sales representative. In other words, a human agent in the eCommerce sale process is highly needed to secure the confidence of customers placing orders online, especially for the first time. Apart from real-time communication, another form of convenience offered by online shopping solutions include access to customer reviews. For example, P5 said, “…consumers bought products with more and genuine reviews on our site….” In other words, products with the highest number of positive reviews were easily marketable than those that did not. In this regard, it implies that customers tend to trust other customers when buying products online. Therefore, SMEs trying eCommerce for the first time must be mindful of having an efficient and effective review system, where customers can be posting reviews about various brands regarding their experience using them. Above all, due to movement restrictions, customers were most thrilled by eCommerce’s home delivery approach. P7 said, …our customers preferred to shop with us because their orders could be delivered home…” In the context of this statement, P7 also added that customers were always ready to incur the delivery costs as an additional cost to the actual price of the product. However, some eCommerce operators also provided the order and pick model, whereby customers could order their products online and then pick them from a designated location or store. Consequently, such an approach helped businesses to easily comply with Covid-19 protocols by reducing customer traffic into their stores.

Finally, the participants implied some of the additional factors that customers looked into when purchasing online. Particularly, they highlighted that many customers had a heightened sense of environmental-friendly garments. For example, P4 said, “…shoppers had an elevated consideration on raw materials used to make garments …” In the context of this quote, the participant highlighted that a majority of the customers that called to place an order online were likely to request to know about the material used to make the garments, not only from a personal comfort perspective but also from a sustainability point of view. However, the participant did not explain why the customers might have had a heightened sense of this aspect (sustainability) during the Covid-19 pandemic, prompting the need for future investigation. Besides an increased interest in environmentally friendly products, the customers were also interested in garments that were durable and could easily be repaired. According to P3, “…most customers were interested in durable products that could easily be repaired…” In the context of this quote, the participant highlighted financial challenges, as evidenced in reduced demand for certain garments, might have prompted customers to have more interest in durable and easily repairable garments. Overall, it can be said that customer behaviour changed significantly during the Covid-19 pandemic in unprecedented ways. Based on the observations drawn from the fashion industry, it can be said that shifting from in-store to online shopping might be the only universal behaviour across most SME sectors in the UK. Other behavioural changes observed in the current study were highly specific to the fashion industry, meaning other SME sectors should also perform an in-depth analysis at a business level to capture all customer behaviour dynamics.

          4.3.4 Impact of Covid-19 on workforce

The theme of “impact of Covid-19 on workforce” emerged when the participants were asked to elaborate how the pandemic affected their ability to take risks and how they accessed market information. It was identified as a significant theme because workforce disruptions also affected the resilience of SMEs in the retail sector. Table 14 below summarises the coding process for this theme.

Table 14: Coding Process for the “impact of Covid-19 on workforce”

 

Thematic Code	Interview Extract
Job losses	“…we lost three individuals from our staff when we made misfortunes last year …”
	“…On 1 July this year, we were advised to get back to full business rates liabilities, determined by reference to rents being paid six years ago…we needed to lay off some staff to adapt up…”
Reduction in working hours	“Our staff used to work roughly 40 hours a week however decreased to around 35 equally dispersed in the 7 days of the week …”
	“…most female workers with children reduced their working hours due to disruptions in daycare centers…”
Fear of infection	“…some of our staff had to quit their jobs over fear of contracting the virus…”
	“…our ecommerce software engineer chose to work from over fears of getting the infection…”
Working from home	“…a large portion of our staff decided to work from home since it offered them flexibility to really focus on their kids following the closing down of day care centres …”
	“…our writers, photographer, editor, and art director, inventory manager all chose to work from home as barely any staff stayed in our store…”

 

The responses of the participants depicted both the workforce challenges they faced during the pandemic and how they solved them. The first challenge was the loss of crucial personnel since the companies could no longer afford to pay them. For example, P2 said, “…we lost three individuals from our staff when we made misfortunes last year …” In this regard, the participant argued that when the company started making losses as a result of the negative impact of the pandemic, they had to lay off some staff to cope up with expenses. This claim is further justified by another participant, P4, who said, “On 1 July this year, we were advised to get back to full business rates liabilities, determined by reference to rents being paid six years ago…we needed to lay off some staff to adapt up…” In this regard, the participant insinuated that their business is responsible for paying business rates liabilities for their commercial space, which resumed in full amount after the government had provided relief. Therefore, they could no longer cope up with the expenses, leaving them with the option of laying off some of their personnel. In the context of the quotations above, the participants were particularly concerned about their loss of crucial staff. In that regard, they were worried about the performance of their business in the long-term, and particularly the issue of competition. In other words, the loss of crucial staff threatened the resilience of their businesses.

Apart from the loss of staff, another issue that emerged under this theme is the reduction in working hours. First, most workers, especially women, deliberately chose to reduce their working hours to cater for their children since daycare centers were shut down during the pandemic. According to P1, “Our staff used to work roughly 40 hours a week however decreased to around 35 equally dispersed in the 7 days of the week …” In the context of this quote, the participant explained that before the onset of the pandemic, most workers used to work five to six days in a week. However, after the onset of the pandemic, a considerable number of their workers preferred to work all the working days of the week each with reduced number of hours. However, this method was predominantly used by Business B. Another approach that was proposed by P6 is the idea of compressed hours. He said, “…most female workers with children reduced their working hours due to disruptions in daycare centers…” A further inquiry into how they reduced their working hours, the participants highlighted that most women workers preferred to work in prolonged hours in certain days of the week when their husbands are available to take care of their children and then reduced hours when they have to take care of their children. The main reason behind this working pattern was the fact that daycare centers were shut down to minimise the spread of the Covid-19 virus. As a result, parents had to take full responsibility to care for their children. Consequently, they had to reduce their working hours in certain days of the week to commit to this responsibility. The participants’ expressions regarding these approaches did not contain negative connotations rather a means of developing and sustaining resilience against the pandemic. It was one of the ways businesses remained agile during the pandemic.

Finally, apart from making working hours flexible to the changing conditions during the pandemic, another way businesses remained on operation following curfews, movement restrictions, and curfews entailed encouraging their staff to work remotely. Especially, in the fashion retail sector, working remotely was a possibility as explained by some participants, especially those that operated a successful ecommerce platform. For example, P7 said “…a large portion of our staff decided to work from home since it offered them flexibility to really focus on their kids following the closing down of daycare centres …” This participant reaffirmed the claim put forth in the previous paragraph that most women workers preferred flexible working hours to cater for their children. In the context of the quotation above, P7 demonstrated that working from home facilitated the flexibility of working hours more effectively than reporting to the physical stores. However, not all fashion retail jobs were suitable for remote working. For example, P2 said, “…our writers, photographer, editor, and art director, inventory manager all chose to work from home as barely any staff stayed in our store…” In the context of this quotation, the participant argued that not all job positions were suitable for remote working. For example, the agents responsible for delivering the merchandise to customers were required to work from the store. On a similar thought, P7 added, “…our ecommerce software engineer chose to work from over fears of getting the infection…” However, in the context of this quotation, the participant emphasised that fear of infection was the primary intention behind working from home. This claim is further supported by another participant, P3, who said, “…some of our staff had to quit their jobs over fear of contracting the virus…” Therefore, it can be said that those businesses that lost staff over fears of contracting the virus failed to formulate effective retention strategies that would, in turn, promote their resilience. Instead, businesses that planned and organised their staff to work from home were more likely to retain their staff. Overall, focusing on staff retention and organising flexible working conditions was one of the ways fashion retailers in the United Kingdom remained agile and resilient to the Covid-19 pandemic.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER 5: DISCUSSION OF FINDINGS

5.1 Introduction

This chapter discusses the findings in light of the literature review findings. Particularly, the quantitative and qualitative findings will be consolidated in pursuit to addressing the research aims and objectives and answering the research question. Primarily, the discussion will entail the resilience levels of SMEs in the United Kingdom during the Covid-19 pandemic. Besides, it will also address the challenges that faced fashion retail SMEs in the United Kingdom and offer recommendations on building and sustaining resilience during an economic crisis. Understanding the challenges that faced the SMEs will help shed light on how to build resilience from a realistic point of view.

5.2 Challenges that Faced Fashion Retailing SMEs During the Covid-19 Pandemic

The current study’s findings indicated that SMEs were more vulnerable to the pandemic-induced disruptions because of various challenges that faced them at a higher magnitude. Although this topic domain has been investigated widely in the literature, little is known about fashion retailing SMEs’ specific challenges during the Covid-19 pandemic. The first challenge discovered is demand reduction for garments. Mainly, the household viability levels during the Covid-19 pandemic were deficient, with only about 35% of the 33 surveyed businesses reporting little or no pandemic impact on household viability. In agreement with the ONS (2021) and Hutton (2021), the decline in demand for various garments resulted from decreased household viability as most people decided to hold their savings in response to economic uncertainties in light of the pandemic. ONS (2021) and Hutton (2021) indicated that only essential products, such as foodstuffs, sustained their demand during the pandemic. Most of the retailers that participated in the qualitative part of the study focused on luxury brands, categorised as non-essential. As a result, most of them complained about reduced sale volumes in their stores, which is consistent with Euromonitor International (2020) report on the reduced demand for luxury brands during the Covid-19 pandemic. Besides, one of the participants (P7) in the qualitative part of the study highlighted that some types of garments (e.g., jeans, trousers, and jackets) lost their demand more significantly than other garments, probably because of their non-essential nature.  Nonetheless, it can also be said that since most people were working from home following movement restrictions, the demand for these types of garments must have been reduced as they are commonly worn outdoors. As a result, most businesses dealing with such garment types experienced a considerable loss of business to the extent of even cancelling supplier orders. Overall, there was a consensus between the qualitative and quantitative parts of the current study and prior research, thus affirming that most SMEs in the fashion retail sector must have lost business at unexpected rates due to the pandemic.

Another challenge that faced fashion retailing SMEs in the United Kingdom during the Covid-19 pandemic was supply chain disruption. As well, this subject matter was extensively investigated during the literature review. However, the literature review findings were general because they cut across the various sectors in which SMEs operate. Therefore, the review cannot be effectively used in finding amicable solutions concerning building resilience among the fashion retailing SMEs in the UK due to a lack of sectoral focus. The problem of supply chain disruption was revealed in the qualitative part of the study. Based on the frequency and magnitude in which the participants emphasised the difficulties they encountered with their suppliers, such as losing suppliers who ran out of business and shutting down of international borders, it can be said that it must have been one of the most significant challenges SMEs faced during the pandemic. This observation agrees with the remarks made in the literature review section, whereby supply chain disruption was widely mentioned in policy documents, such as ITC (2020) and OECD (2020a). The qualitative findings offered more in-depth insights into the exact nature of the supply chain disruption that fashion retailing SMEs encountered. For example, some of the causes identified include a reduction in demand for garments that subsequently resulted in the cancelling of orders, which were consistent with those identified in prior research (e.g., Zhao and Kim, 2021) and industry surveys (e.g., International Textile Manufacturers Federation, 2020). As most suppliers went out of business, fashion retailing SMEs were forced to look for new suppliers as the situation started to normalise. This disruption affected the agility of SMEs during the pandemic, which directly affected their ability to build resilience. Also, it is worth noting that the problem of supply chain disruption was not reported in the quantitative findings because of the closed-ended nature of the questions. However, a closer look into the individual dimensions of Oxfam’s resilience measurement tool reveals that most of the surveyed SMEs (about 56%) reported that they were not appropriately prepared before the onset of the pandemic. Since supply chain disruption was a prominent event considering the lockdowns and the shutting down of international borders, it was predictable that it would have been the most disturbing challenge to retailing SMEs, especially those that trade international garment brands because most of them were not prepared to handle the pandemic. This observation supports the claim in prior research that SMEs that were well prepared (e.g., experienced in risk management) were more likely to handle the negative consequences of the pandemic more effectively than those that were caught off guard (Alves et al., 2020). The findings also resonate well with Westrum’s (2006) model, which emphasises the importance of prior preparedness to handle uncertainties associated with a pandemic of a certain magnitude. Therefore, it can be said that one way how SMEs could have handled supply chain disruptions would be through adequate preparedness before the onset of a crisis. As such, SMEs need to adopt formal mechanisms of assessing their preparedness.

Apart from supply chain disruptions, fashion retailing SMEs in the United Kingdom also experienced significant technological barriers during the pandemic. In the quantitative part of the study, the problem was seemingly not of equivalent magnitude as portrayed by the participants of the qualitative aspect of the study. For example, about 62% of the 33 surveyed businesses indicated that they tried a technological solution to offset the pandemic-induced disruptions. However, in the qualitative part of the study, most participants stated that they experienced significant barriers to technological adoption during the pandemic, such as inadequate marketing efforts due to financial challenges. In this case, it can be said that although a majority of the surveyed SMEs adopted technological solutions, only a few succeeded in solving the target problems. By considering the knowledge sharing limitations during the pandemic due to social distancing protocols and movement restrictions, it can be said that most SMEs lacked the skills and technical competencies to utilise technological solutions effectively. This observation echoes Prasanna et al.’s (2019) findings that knowledge and skills are critical determinants of successful technology adoption in the business world. The few businesses with successful adoption of technological solutions during the pandemic reported higher levels of resilience; for example, all the three firms successful SMEs in the qualitative part of the study indicated considerable returns from their eCommerce solutions, particularly in maintaining their suppliers, thus evading supply chain disruption challenges. This observation is consistent with McMaster et al.’s (2020) claim that retailers that went utterly online during the pandemic managed to overcome supply chain disruptions due to order cancellations because they were more likely to convince suppliers to adjust to the new demand. In the qualitative part of the study, out of the seven business owners interviewed, three indicated that they were running an eCommerce platform that grew tremendously during the pandemic. Some others were still relying on social media platforms to market their products and connect with their customers. In this regard, the four participants of the qualitative part of the survey implied that they experienced technological adoption challenges during the pandemic, pulling them behind their competitors. Some of these challenges include marketing barriers. None of the prior studies implied that SMEs struggle with marketing their technologies to alleviate challenges facing them in the short term. Instead, most of the studies reviewed in Chapter 2 of this report (e.g., Prasanna et al., 2019) indicated that technological adoption among SMEs can help them build resilience against uncertainties and challenging times like the Covid-19 pandemic. In light of this observation, it can be said that most fashion retailing SMEs in the United Kingdom remained vulnerable to the pandemic because of the barriers they experienced in their technological adoption. Therefore, it can still be said that the findings of the current study are congruent with the literature review findings (e.g., McKinsey & Company, 2020; Prasanna et al., 2019) because most of the SMEs that reported issues with technological adoption were also more likely to report other problems like supply chain disruption. How the SMEs that succeeded in technological adoption improved their resilience will be highlighted later in this chapter. Still, at this stage, it can be said with certainty that alleviating supply chain disruption challenges was one of the benefits.

Another challenge that faced fashion retailing SMEs concerns limited knowledge sharing. In the quantitative part of the study, it was discovered that the social and institutional capacity of the surveyed SMEs reduced significantly during the pandemic; only about 48% of the surveyed SMEs reported to have had adequate social and institutional capacity during the pandemic. This finding was expected because of the observation that participants of the technological adoption barriers during the pandemic. This claim agrees with the literature review findings that there is a significant correlation between knowledge sharing and innovativeness (Byukusenge & Munene, 2017). Therefore, SMEs’ reduced social and institutional capacity implies that they experienced reduced social connections during the pandemic that could have helped them promote their knowledge sharing. On the exact dimension of institutional and social capacity, only 36% of the surveyed SMEs reported that they were adequately engaged in formulating the government’s response to the pandemic. Hence, most of them were disengaged, implying that most SMEs’ response to the pandemic was not adequately aligned to the government’s response strategy. In other words, most SMEs did not have proper guidance on how to adopt technology effectively to promote their resilience due to low levels of government support. This claim is consistent with Singh et al.’s (2021) findings that there is a need for a curated intervention to promote knowledge sharing during a time of uncertainty like the Covid-19 pandemic. The literature review section discovered that technology is a crucial pillar to resilience-building among SMEs, especially during the Covid-19 pandemic, since digital interactions increased significantly (Prasanna et al., 2019; LaBerge et al., 2020). Based on such observations, it can be said that the relationship between knowledge sharing and innovativeness points out the magnitude at which the pandemic affected SMEs’ resilience building. For example, in addition to lack of adequate government engagement, the pandemic kept businesses away from social connections, thus hindering their knowledge sharing and consequently the innovativeness needed to improve resilience. As such, it can also be said that the pandemic destroyed even SMEs’ existent resilience and introduced considerable barriers to resilience building.  Knowledge sharing is a universal attribute of SMEs regardless of their economic sector, meaning this challenge can be generalised to SMEs other than fashion retailers. Although this claim is valid in the context of the current study’s findings, digital technologies like social media would have helped SMEs boost their knowledge sharing in alternative ways other than attending business exhibitions and shows physically. This observation is consistent with prior research (e.g., Tønnessen et al., 2021) that digital knowledge sharing during the Covid-19 pandemic improved the creative performance of employees working from home. Therefore, it can be stated with certainty that UK SMEs, especially those in the retail sector, missed opportunities to promoting their resilience. No study has so far investigated the extent to which SMEs utilised digital technologies for knowledge sharing. Also, future research should investigate how SMEs, especially in the fashion retail sector, conducted knowledge sharing. From the findings of such a study, gaps can be identified, and practical solutions recommended.

Apart from limited knowledge sharing, another challenge that faced fashion retailing SMEs is a lack of adequate savings to adapt to the new situation. The quantitative part of the study revealed limited access to contingency resources and support during the Covid-19 pandemic, exposing SMEs to permanent failure; a majority of the 33 surveyed SMEs (about 56%) did not have adequate access to government support during the Covid-19 pandemic. One of the aspects of contingency resources was savings. In that regard, a considerable number of the 33 surveyed businesses (48%) reported inadequate savings before the onset of the pandemic, and others depleted their savings a few months after the pandemic. The observations were further confirmed by the qualitative part of the study, whereby some of the participants reported that their business did not have enough savings to set up an eCommerce platform and market it. In this regard, the problem was two-face; SMEs lacked adequate marketing knowledge for their digital solutions, whereas others did not have sufficient funds to set up one. Therefore, the findings of the current study are congruent with prior research (e.g., UKaid, 2020; Lu et al., 2020) that most SMEs, especially those owned by women, were at higher risk of permanently collapsing than larger companies that had adequate earnings and savings before the onset of the pandemic.  This observation suggests that even without a crisis, SMEs are more likely to struggle financially than large companies due to systemic problems in government policies. In a pure sense, it is more probable that due to the small-scale nature of SMEs, they should be likely to sustain their operations during a crisis than larger companies. The opposite of this logic implies that the UK government needs to put policies that offer adequate protection to SMEs that can enable them to accumulate enough savings to prepare them sufficiently before the onset of any pandemic. This observation agrees with Gourinchas et al. (2020) that government support during the pandemic only reduced business failure rates by 9.1%, which means even the businesses that accessed government support were still vulnerable in the face of the prolonged pandemic. Therefore, the government should shift its focus from solely providing direct support to SMEs after the onset of a crisis to facilitating SMEs to prepare adequately even before the onset of the pandemic.

5.3 Building Resilience amid the Pandemic

Building resilience amid the pandemic proved to be the most challenging part for most retailing SMEs based on the qualitative and quantitative findings. However, the qualitative findings highlighted how fashion retailing SMEs remained resilient to the pandemic. This section aims to discuss the resilience levels of the surveyed SMEs before delving into the specific ways in which SMEs can build and sustain their resilience during an economic crisis.

          5.3.1 Fashion retailing SMEs’ resilience levels during Covid-19 pandemic

The resilience levels of the surveyed SMEs were measured using Oxfam GB’s resilience measurement tool, which was modified to accommodate the dynamics of the SME retail sector in the United Kingdom. The modification worked perfectly based on the internal reliability of the resultant instrument. The findings revealed that the 33 businesses surveyed scored less than average (about 49%) in their resilience levels. Although no historical data for comparison purposes to determine the extent to which the pandemic affected the resilience of these businesses, it can be stated with certainty that the crisis must have had a considerable impact on them. The sentiments of the interviewees further support this claim that many aspects of their businesses, such as the supply chain, were interrupted, leaving them struggling to adapt to the new situation. Although no data were used from larger companies, the current study’s findings are congruent with observations in prior studies that the pandemic had a severer impact on SMEs than larger companies (OECD, 2020). Due to the constant interaction between absorptive capacity, adaptive capacity, and transformative capacity, it can be said that UK retailing SMEs in the fashion industry failed to identify the Covid-19 pandemic shocks and disruptions on time due to a lack of prior preparedness, which subsequently affected their adaptive and transformative capacities. Therefore, at this point, it can be said that retailing SMEs in the fashion industry should begin by applying a systematic approach towards understanding the dynamics of a given economic crisis by identifying the possible shocks and disruptions it is likely to introduce. This claim is congruent with Hobbs’ (2021) observation that the food industry quickly adapted to the new situation because corporates successfully predicted the shift from food services to food retailing. However, the research (Hobbs, 2021) failed to recognise that the food retailers’ successful adaptation to the pandemic resulted from stable demand for food services because they are essential for daily use. Therefore, such observations may hold little relevance in the fashion retailing industry because garments are mostly non-essential, especially considering most people remained indoors during the pandemic. Besides, the onset of the pandemic and its enormous impact on the performance of businesses were not anticipatable. It can alternatively be said that although it is essential to systematically evaluate the kind of impact a crisis is likely to have on the operation of businesses, it is also essential to consider other significant parameters. It is also imperative to dig deeper into the various components of Oxfam GB’s resilience measurement tool to determine some of the parameters that retailing SMEs in the fashion industry ought to have looked into in their pursuit to promote their resilience against the pandemic. Overall, the current study’s findings indicated that retailing SMEs in the UK’s fashion sector were not adequately resilient against the Covid-19 pandemic.

The first component of resilience that was measured in the current study is household viability. It is one of the components that scored the lowest (approximately 39%) among the rest. Household viability also had a moderate correlation with strategic performance, primarily out of the businesses’ control. The findings were expected because most of the surveyed SMEs focused on luxury brands, which are non-essential; hence, most people could not spend their savings on them considering the economic uncertainties associated with the Covid-19 pandemic. This claim is congruent with the Deloitte Insights report investigating people’s expenditure during the Covid-19 pandemic (Boersch et al., 2021). However, based on the report findings, people will soon start to spend their savings once Covid-19 vaccinations are taken on a large scale. This trend is anticipated because most people will get rid of the economic uncertainties of the pandemic from their minds. However, because of the actual negative impact of the pandemic, it can also be argued with certainty that although the demand for luxury clothing brands will increase soon, it will take some time to get back to the pre-pandemic levels. Since demand reduction was beyond the control of SMEs, it can be said that less competitive SMEs must have suffered the most. This claim is congruent with OECD’s (2020a) observations that demand reduction resulted in liquidity shocks, resulting in most SMEs being unable to function. At this point, since demand reduction was beyond SMEs’ internal capacity to control, it can be said that no resilience-building recommendation can be derived from this finding. As such, it is imperative to investigate other ways in which SMEs should have built and sustained their resilience against the pandemic.

Another dimension of Oxfam GB’s resilience measurement tool was innovation potential. A considerable number of the 33 surveyed SMEs (about 46%) indicated that they had inadequate levels of innovation potential to handle the Covid-19 pandemic-induced challenges. As highlighted in the previous sub-section, SMEs experienced significant barriers in technological adoption during the Covid-19 pandemic, posing as one of the most significant challenges to their resilience against the pandemic. However, many surveyed SMEs (62%) indicated that technology became handy in handling the pandemic; even so, only a few managed to utilise the full potential of technology, agreeing with Singh et al.’s (2021) finding that most people working from home during the pandemic missed quality knowledge-sharing opportunities despite the availability of digital solutions. This statement makes sense in light of Prasanna et al.’s (2019) discovery that knowledge sharing is a crucial determinant of successful technology adoption in business. Technological adoption as an element of innovation potential has already been discussed many times in the previous paragraphs, yet the dimension is diverse in its aspects. However, since they have already been discussed in detail in the literature review section and presented individually in the analysis chapter, it is imperative to focus on how the findings can help propose sense-making recommendations for resilience-building. The quantitative findings indicated that almost half of the surveyed SMEs (50%) could not take adequate risks probably because their employees were not adequately prepared to handle a crisis of such an enormous magnitude. As discussed earlier, this situation was worsened by the fact that social distancing regulations impaired knowledge sharing. Since most SMEs could not successfully adopt technologies like eCommerce to counter this effect, they were forced to close down either temporarily or permanently. This observation supports the claims by Albonico et al. (2020) that most SMEs were unable to adapt to the pandemic situation because of a lack of adequate preparedness before the onset of the pandemic. The claim also supports Prasanna et al.’s (2019) finding that access to quality knowledge sharing can successfully facilitate SMEs to adopt effective technological solutions in handling the pandemic-induced challenges. Therefore, in the recommendations section on promoting innovation potential, one of the aspects that will be looked into will include how businesses can prepare adequately before the pandemic because it seems to be an essential determinant of resilience for SMEs when handling a crisis like the pandemic. Such recommendations will primarily be drawn from Westrum’s (2006) works because the Oxfam GB tool does not offer any recommendations on how communities can prepare before the onset of the pandemic. However, even before digging deeper into the topic, it is evident that having adequate savings is one of the ways of prior preparation. The idea of adequate savings makes sense in light of Albonico et al.’s (2020) observation that most SMEs in the United Kingdom lost business during the pandemic, forcing them to rely on their savings to remain operational, such as in catering for their fixed expenditures. Besides, employee preparedness can involve such activities as on-job training and an excellent environment to promote knowledge sharing. Overall, innovation potential is one of the dimensions of resilience that the surveyed SMEs scored above average, but because it is the pillar of resilience building, much more needs to be done to improve this aspect in the United Kingdom, especially in future economic crises.

The third dimension of the resilience measurement tool was contingency resources and support access. More than half of the surveyed companies (about 54%) reported not having adequate access to contingency resources and government support. This trend partially explains a considerable number of SMEs, especially those operating in the non-essential sectors of the economy, such as the fashion industry, closed down permanently. In that regard, SMEs were more vulnerable to the pandemic-induced challenges because, as discussed earlier, even those that accessed government support only managed to deal with a few challenges, leaving them still exposed to the risk of failure in the long term. In this case, it can be said that the distribution of risk in the United Kingdom is skewed, a problem that can only be addressed at the policy level. This argument resonates well with Castillo et al. (2016), who discovered that transformative capacity is key to building resilience in business. In that regard, transformative capacity among SMEs is mainly influenced by external factors, such as the effectiveness of government policies for dealing with SME challenges (Castillo et al., 2016). Also, under this dimension, the issues of savings and social connectivity come in; hence, they will not be discussed again. One of the most crucial aspects of this dimension entails access to government support during the crisis. The analysis chapter highlighted that access to government support was one of the strengths of retailing SMEs in the United Kingdom during the pandemic, which promoted their strategic performance significantly. Even so, about 56% of the surveyed SMEs reported that they had little or no access to government support during the pandemic. If social connectivity and group participation were fully present, retailing SMEs in the fashion industry would have accessed government support higher than the current rates. This observation agrees with Gębarowski’s (2014) finding that business exhibitions and shows help SMEs to share various types of knowledge, such as the advantages and disadvantages of various government programmes to support SMEs, enabling them to make better-informed decisions.  However, the current access rates to government support cannot be underestimated because they helped many SMEs escape the pandemic-induced disruptions. However, on an overall scale, the resilience of the SMEs was below average, implying that government support alone is not adequate in improving the resilience of SMEs in the face of a crisis of such magnitude. This claim agrees with Filippaios’ (2019) observations that resilience-building is a multidimensional approach that cannot depend on government support alone. Instead, the internal capabilities of businesses, such as their innovation potential, and the external environment, such as household viability, play a significant role. Therefore, in the sense-making recommendations on how SMEs can build resilience during a crisis of such a magnitude, much focus will be placed on internal capabilities which can be manipulated at the organisational level. Sense-making recommendations that focus on the external environment will mainly entail increased access to government support. Also, although Filippaios (2019) somewhat undermined the significance of government support because it cannot function on its own in building resilience, it is worth noting that such support can promote the innovative potential of SMEs based on the qualitative findings of the current study. This observation agrees with Foreman-Peck’s (2012) finding that SMEs that received government support were more likely to achieve rapid growth due to an improved innovative potential. This claim centralises the importance of innovative potential in resilience building, meaning that even improved social connectivity and availability of contingency resources all promote resilience because they contribute directly to innovation potential. Indeed, the correlational analysis revealed that innovation potential was one of the dimensions of SME resilience that promoted retailing SMEs’ strategic performance the most.

The final dimension of Oxfam GB’s resilience measurement tool was social and institutional capability. This dimension had the strongest correlation with strategic performance, which holds the most considerable impact on how SMEs built their resilience during the pandemic.  However, at this point, it is worth noting that the level of correlation between a resilience dimension and strategic performance does not necessarily imply the level of resilience of SMEs. For example, the 33 surveyed SMEs scored below average (about 49%) on this dimension despite strongly correlated with strategic performance. Scoring below average implies that most SMEs were not aware of how to prepare and tackle the pandemic after its onset. Besides, most of them (64%) were not engaged by the government when formulating strategies for tackling the pandemic. However, the only strength of the SMEs in regards to this dimension was the fact that most of them accessed information about how to curb the spread of the virus, probably due to the advancement in digital communication technologies and social media. Most of the surveyed SMEs (52%) portrayed negative perceptions towards local leadership regarding how they handled the pandemic in ways that promoted their operational effectiveness. Hence, since the SMEs scored below average on this dimension, it can be said that their strategic performance was also significantly impacted negatively. These observations agree with the findings of Filippaios (2019), which implied that SMEs’ perception of the effectiveness of the local leadership in handling the pandemic might not be a true reflection of the reality. In other words, government support alone without SMEs’ preparedness before the onset of the pandemic was less likely to produce a conspicuous impact to be noticed by SME owners. Based on this observation, it can be said that much focus should be placed on building the internal capacities of SME businesses, such as employee and business-wide preparedness to handle crises of any magnitude. This observation supports Westrum’s (2006) assertion that an organisation’s internal capacity is the surest way to approach unexampled disruptive events like the Covid-19 pandemic. Therefore, this claim further supports the earlier observation that innovation potential is a central pillar in resilience building in the face of a crisis that disrupts the operational capacities of businesses.

Overall, it can be said that most SMEs in the fashion retail sector in the United Kingdom remained vulnerable to the Covid-19 pandemic due to weak internal business environments. Seemingly, there is a strong association between the internal and external business environments based on the current study’s findings. For example, when the external business environment is stable (e.g., before Brexit and the onset of the pandemic), SMEs in the fashion industry, especially those focusing on luxury brands, are highly profitable. However, when the economic situation worsened due to pandemic-induced disruptions, the internal environment of businesses was negatively affected significantly, resulting in many SMEs closing down their businesses permanently. Based on this observation in light of the Department for Business, Energy, and Industrial Strategy’s (2019) findings, it can be said that the strength of a business’s internal environment is a significant resilience determinant during a crisis. Department for Business, Energy, and Industrial Strategy (2019) particularly discovered that large scale businesses were more likely to remain resilient against the pandemic than SMEs. In this case, the external environment was disrupted by the Covid-19 pandemic, affecting small- and large-scale businesses in equal measure. Therefore, large-scale businesses managed to be resilient because they were more likely to have a healthy internal environment than SMEs. Based on this notion, it can be reaffirmed that more focus should be placed on improving the internal capacities of SMEs as a quest to promote their resilience during a crisis. However, this approach should be performed systematically, as explained later in this chapter. Before delving into the specific ways in which SMEs should have built their resilience during the crisis, it is imperative to also discuss the strategic performance levels of SMEs during the pandemic. Such an approach can help derive alternative models for improving SME resilience during a crisis like the pandemic because the strategic performance was strongly correlated with the resilience of the 33 SMEs surveyed.

Concerning strategic performance, it is imperative to note that the correlation between the two variables does not reflect the actual strategic performance of the SMEs during the pandemic. This claim is based on the statistical assumption that when two variables are correlated, they will do so regardless of their real-world measure/scores. When one variable increases, the other one also increases in equal measure. Instead, the best way to estimate the levels of strategic performance of the surveyed SMEs during the pandemic is by examining the descriptive statistics. The 33 surveyed companies scored moderately good (62%) in their strategic performance, better than the resilience score. In that regard, it can be argued that it can be somewhat challenging to manipulate resilience via promoting strategic performance as it seems not to have been much more affected by the pandemic than resilience. However, this observation would have been more sound and realistically robust if pre-Covid data for strategic performance were available for confirmation. In other words, it would have been less challenging to make a sound recommendation for promoting resilience via strategic performance if the effect sizes of the pandemic on resilience and strategic performance were known. The strong correlation observed between the two variables can mean that it is possible to promote resilience by improving strategic performance. This claim agrees with Aidoo et al.’s (2021) observation that there is a strong correlation between adaptive resilience and strategic performance. However, since there are three types of resilience, namely absorptive, adaptive, and transformative, it can be argued that improving strategic performance can quickly produce an imbalance between the three types of resilience, resulting in other unprecedented issues.  In other words, it can quickly swell up adaptive resilience while leaving behind absorptive and transformative resilience, resulting in a malignant situation. Even so, this claim should be treated as tentative because no study has so far confirmed it using empirical data. The claim is based on a hypothetical notion derived from the specific nature of the relationship between strategic performance and resilience among SMEs. Overall, it can be said that it is alternatively possible to improve resilience by promoting the strategic performance of SMEs. The specific ways in which this approach can be implemented pragmatically will be discussed in the following sub-section.

          5.3.2 Improving resilience

Based on the observations and notions derived from the previous discussion, it can be said that there are two ways in which SMEs can promote their resilience against crises like the pandemic. The first one entails focusing on the various dimensions of resilience directly based on the quantitative findings of the current study. The second one involves identifying determinants of resilience like strategic performance and enhancing them in a quest to influence resilience, which can be accomplished by applying the qualitative findings of the present research. These approaches are explored in this subsection. Notably, while discussing the various dimensions of resilience using Oxfam GB’s resilience measurement tool, various areas of weakness were identified. In this sub-section, these areas will be revisited based on the qualitative findings to make sense-making recommendations on how they should have been handled during the crisis. Also, it is worth noting that the recommendations will be based on the resilience implications drawn from the SMEs that reported being resilient during the pandemic, such as Business G (qualitative part of the study). Such implications will be discussed in light of the literature review findings, whereby inconsistencies between prior research and the current research will be flagged and referred for further investigation in future research.

First, little focus will be put on household viability because it is beyond the organisational control of SMEs. However, before discussing the dimensions that can be controlled at the corporate level, like innovation potential, it is imperative to provide rough guidelines on what the government can do to improve household viability. First of all, according to the qualitative findings, reduced household viability due to external economic conditions implies a direct reduction in the demand for goods and services, especially non-essential ones like clothing. Therefore, the apparent answer to building resilience from this perspective can be exclusively the role of government to improve the economy. This claim is consistent with Nicola et al.’s (2020) findings that channelling carbon dividends to households can help improve household expenditure during the Covid-19 pandemic. However, based on the qualitative findings, at the business level, it can be said that enterprises will need to improve their competitive advantage in light of increased competition from potential rivals by being more agile and responsive to the dynamicity of the pandemic. Thus, the most critical aspect in this regard is how companies, particularly SMEs, can improve their competitive advantage during a crisis, such as the specific strategies to be implemented to promote businesses’ agility. According to the quantitative findings of the present study, the first disadvantage that SMEs suffered during the pandemic is limited access to information about their competitors due to movement restrictions, social distancing, and other prevention protocols; about 50% of the 33 surveyed companies indicated that they did not have access to market information during the pandemic. This statement agrees with the findings of Gębarowski (2014) that participation in events like business exhibitions and shows facilitates the sharing of information, such as customer needs and competitors. The qualitative part of the current study revealed that understanding customer needs helped eCommerce retailers utilise relevant online advertisements. Therefore, assuming that the understanding of customer needs is key to building and solidifying a competitive advantage, it can be said that the pandemic-induced disruptions handcuffed SMEs to take action in pursuit of promoting their competitive advantages. Such claims are valid because many SMEs examined in the quantitative and qualitative parts of the current study were unable to adopt technology effectively to deal with the pandemic-induced disruptions. However, this claim is valid only in light of the previous statement if technology helps companies develop their competitive advantage. The observation particularly supports Prasanna et al.’s (2019) finding that technological adoption improves SME performance, implying that technology helps in boosting competitive advantage. Although technology and effective marketing are central to developing a competitive advantage in light of reduced demand for goods and services, several other factors are determinants, as discussed further below.

While expressing how supply chain disruption affected their businesses, the most aspect pointed out by the participants (qualitative part) was a competitive advantage. In this regard, it can be said that dealing with the various issues related to supply chain disruption helped SMEs promote their competitive advantage against rivals. For example, the specific types of brands the companies traded were part of their competitive advantage. Interviewees further reported that the ability to redesign their business processes, such as adjusting the size of orders to retain their suppliers, was key to promoting their agility in pursuit of sustaining their competitive advantages despite the pandemic-induced disruptions. This finding is consistent with Westrum’s (2006) suggestion that resilient businesses redesign their business processes effectively to retain their competitive advantage in the face of uncertainty. Therefore, a retailing business was more likely to lose customers to competitors if it began to sell a different brand of garments due to supply chain disruptions with the former supplier. As a result, some SMEs pursued to maintain their long-term relationships with their suppliers by taking smaller orders. Therefore, it can be said that maintaining a healthy relationship with suppliers through whichever mechanism works effectively can be considered a strategic action to improving a business’s competitive advantage and resilience. This claim is consistent with Albonico et al.’s (2020) observation that most SMEs were doubtful of maintaining their supply chains amid the pandemic disruptions because they feared losing touch with their current suppliers. The qualitative part of the study highlighted that some SMEs had resorted to placing small orders with their suppliers because they feared they might destroy their relationship if they placed large orders, which they could then end up cancelling due to demand reductions. The placing of small orders is one of the specific solutions that worked for fashion retailing SMEs in the United Kingdom during the pandemic. However, such solutions might be highly variant depending on numerous factors, such as the business sector, company size, and business model. Therefore, the general recommendation that can be driven from this finding is the need to identify ways of developing a competitive advantage in the face of reduced demand for commodities and restructuring businesses to counter crisis-induced supply chain disruptions.

The suggestion provided in the previous paragraph is primarily drawn from the first notion of building resilience by observing the specific dimensions of resilience and implementing interventions that directly affect them positively. Another way of building resilience through responding to changes in household viability can include manipulating strategic resilience. The correlational analysis revealed a strong correlation between resilience and the strategic performance of the surveyed SMEs. It was also revealed that household viability was moderately and positively correlated with strategic performance. However, the current study’s findings did not point out the direction of association between the two variables. For example, one may argue that improved household viability improves strategic performance, but the latter does not necessarily improve the former. This claim is consistent with prior research (e.g., Karimi & Huatuco, 2019; Xu et al., 2013) that customer demand can influence competition strategy, but the latter does not. However, prior studies supporting the statement utilised sample sizes from large companies; hence, their findings should be cautiously applied in the context of the current study. Therefore, assuming that the relationship is bi-directional, it can be said that implementing ways to improve strategic performance can help alleviate the negative impact of reduced household viability of SMEs. However, it should be noted that improving strategic performance will not directly impact household viability because the variable is controlled externally instead of at the organisational level. Therefore, it is worth noting that improving strategic performance will only help to offset the negative impact of reduced household viability, a claim that echoes well with prior research (e.g., Pinheiro de Lima et al., 2009) that measuring the strategic performance of businesses helps inform continuous improvement efforts. Hence, it can be recommended that when it is out of the SMEs’ control to deal with certain aspects of resilience (e.g., household viability) because they are controlled externally, it is possible to deal with them through indirect means, such as the manipulation of organisation-level variables that relate with them. For example, measuring strategic performance using a framework like the one offered by Chandrashekhar et al. (2017) and addressing areas of weakness can work as an effective solution to improving resilience. However, it is also worth noting that these claims should be treated as tentative until confirmed in a future case study analysis. The claims made in this paragraph are drawn mainly from the correlational analysis. Since there is minimal support from the qualitative findings, the claim should be confirmed in a future qualitative study, especially a case study analysis approach. Apart from the strategic performance of SMEs, which is used for illustration purposes in the current research, businesses should also identify other equally important factors which are not investigated in the present study. Therefore, at this point, it can also be said that future research to investigate various organisational factors that influence household viability and manipulate them positively to offset the negative impact on businesses when demand reduces. Ways of improving the strategic performance of SMEs will be highlighted towards the end of this sub-section.

Unlike household viability, SMEs in the retail fashion industry and other sectors in the United Kingdom had organisation-level control over their innovation potential. For example, according to the qualitative findings, companies that had prepared adequately to deal with uncertainties equivalent to the pandemic-induced disruptions were more likely to demonstrate resilience than those that did not prepare adequately. However, it is worth noting that adequate preparation before the pandemic is an open statement that needs further clarification in the current study to attain the specificity needed to provide sense-making recommendations. First, it is imperative to acknowledge that adequate preparation requires different approaches depending on strategic organisational alignment. Most of the 33 surveyed SMEs (56%) felt that they were not adequately prepared to handle the pandemic because they did not anticipate its magnitude. In agreement with Brown et al. (2020), SMEs had already suffered. They spent their emergency resources on Brexit, another economic uncertainty that faced the United Kingdom a few months before the onset of the pandemic. Therefore, they were not adequately prepared before the onset of the Covid-19 pandemic either because they lacked organisational ability to do so or they were not anticipating another economic uncertainty within such a short period. Based on the previous observation that most UK SMEs were more vulnerable to the pandemic than large businesses, it can be said that SMEs faced a dilemma in handling the pandemic, requiring government support as the only solution to save them from the situation. Even so, it is imperative to highlight some of the ways SMEs prepared before the onset of the pandemic, even after struggling with Brexit uncertainties. Overall, the strong correlation between innovation potential and strategic performance implies that an SME’s innovativeness can influence its overall organisational performance. Therefore, SMEs must investigate the specific ways of improving their innovation potential. In agreement with this assertion are Kahn and Candi’s (2021) findings that firm size and the type of product offering can influence the extent to which innovation potential contributes to a firm’s organisational performance. Although not discovered in the current study, Kahn and Candi (2021) further indicated that SMEs should pursue exploitation and exploration innovation strategies to record improved organisational performance. Also, 66% of the 33 surveyed SMEs indicated that knowledge sharing was a crucial determinant of their innovation potential during the pandemic, an observation that agreed with prior research (e.g., Prasanna et al., 2019). Therefore, it can also be stated that creating an organisational culture of knowledge sharing and continuous learning can promote the innovation potential of SMEs. Besides, most of the 33 surveyed participants (54%) indicated that employee preparedness before the onset of the pandemic contributed to their innovation potential. Therefore, it can also be said that employee preparedness, such as through on-job training opportunities, is one of the surest ways of promoting the innovation potential of SMEs. It is one of the ways the government can intervene to promote the preparedness of SMEs before the onset of an economic crisis. For example, during the Covid-19 pandemic, many employees worked remotely, which required a new set of skills.

Apart from pursuing exploration and exploitation innovation independently and training employees, there are numerous other ways for SME businesses to prepare before the onset of a crisis. The first and obvious one is accumulating enough savings at any time for full-time preparation of uncertainties. However, as highlighted earlier, more than 48% of the 33 surveyed companies did not have adequate finances to handle the prolonged pandemic, which is a significant figure pointing out the low to moderate levels of resilience among UK SMEs against the Covid-19 pandemic. Therefore, although it belongs to contingency resources and support access, companies with enough savings were more likely to handle the pandemic disruptions more effectively. This observation is closely similar to Hughes and Fuller’s (2013) argument that the more savings households have, the more resilient they are against economic uncertainties and crises. The claim also agrees with Lu et al.’s (2020) observation that the more savings an SME had during the pandemic, the more likely it could endure the long periods of curfews and lockdowns. Besides, this assertion is congruent with the findings of the qualitative part of the current study, whereby some participants argued that the main challenge that faced their businesses was to incur fixed expenditures when their business premises were closed down. Besides fixed expenses, savings were also crucial in adopting strategies that helped companies develop tangible solutions to handle the pandemic. For example, some businesses adopted technological solutions and doubled their marketing efforts to establish their competitive advantage. In that regard, companies that did not have adequate financial resources did not adopt this solution that emerged as the most effective approach to building and sustaining resilience amid the pandemic. Therefore, at this stage, of greater importance is how SMEs can reserve financial resources. The immediate answer would be improving strategic performance.  In other words, it can be argued that manipulating strategic performance and other organisation-level variables related to savings to offset the negative impact of inadequate savings before the onset of the pandemic still required financial resources to implement. This observation further affirms the importance of accruing savings before the beginning of an economic crisis. Therefore, it can be said that businesses need to effectively manage their finances at any moment (i.e., with or without a crisis) to improve their ability to develop and implement viable solutions for pandemic-induced disruptions. In other words, they should develop strategies to enhance their competitive advantage and innovative performance amid resource scarcity.

Although savings stem from preparedness before the onset of the pandemic, it is not the only factor to be considered. It is worth noting that having enough savings without choosing appropriate strategic options cannot help businesses develop the resilience they require to navigate a pandemic like the Covid-19 pandemic. Instead, the efficiency and effectiveness of the solutions financed will help in building resilience. Besides, solutions should still be effective even amid resource scarcity. The first solution that was adopted by some businesses was knowledge sharing, which enabled them to navigate through the pandemic even with scarce resources, as most were spending from savings accrued before the onset of the pandemic. Notably, the current study revealed that many SMEs had limited access to knowledge sharing during the Covid-19 pandemic. For example, among the 33 surveyed businesses, about 34% reported having completely missed knowledge-sharing opportunities during the Covid-19 pandemic. According to the qualitative findings, some of the interviewees cited reasons include movement restrictions, international travel bans, lockdowns, and curfews. Consequently, most SMEs were unable to develop the flexibility needed to redesign their business processes and adapt effectively to the pandemic-induced disruptions. This observation agrees with prior research (e.g., Lee, 2018; Westrum, 2006) that knowledge sharing promotes individual creativity and enhances innovativeness, allowing business personnel to develop the flexibility needed to redesign processes and align them with new economic conditions. However, these findings are inconsistent with Vătămănescu et al.’s (2020) findings that most SMEs often rely on knowledge sharing as a reaction to fierce competition. Also, it can be said that although knowledge sharing was hindered during the pandemic, companies that engaged in this activity before the onset of the pandemic were more likely to adopt innovative solutions. For example, Businesses E and G of the qualitative part of the study managed to accelerate the growth of the eCommerce platforms during the pandemic before its staff had prepared well before the onset of the pandemic by participating in business knowledge-sharing events, such as exhibitions and business shows. Therefore, it can also be said that besides having adequate savings before the onset of the pandemic, it is also imperative to train staff members adequately not only through knowledge-sharing events but also by facilitating them to participate in on-job formal training. Businesses E and G managed to adopt technological solutions (eCommerce) more effectively during the pandemic because their employees were prepared sufficiently before the pandemic onset. In order of importance, it can be said that knowledge sharing ranks after savings because it is not possible to benefit from knowledge sharing activities if a business does not have enough savings to implement relevant interventions effectively.

Further, the study’s quantitative findings revealed that a considerable number of SMEs’ employees (46%) were not adequately prepared to handle a pandemic of such magnitude. Also, as highlighted earlier, the analysis of the quantitative results resulted in the observation that many companies (34%) struggled to facilitate knowledge sharing during the pandemic to prepare their employees. Based on these findings, it means that most SMEs in the United Kingdom did not have adequate preparation before the onset of the pandemic, agreeing with prior research (e.g., OECD, 2020a) that SMEs were more vulnerable to the pandemic than large businesses. The main implication of these observations is that many SMEs (38%) could not adopt technological solutions to handle the pandemic. In other words, employees were not prepared adequately before the onset of the pandemic to run a technology-based (e.g., eCommerce) company. Therefore, it can be said that there could be a strong correlation between knowledge sharing and employee preparedness. This statement is consistent with LaBerge et al.’s (2020) findings that digital customer interactions increased significantly during the Covid-19 pandemic, meaning employees were supposed to have adequate technical skills to serve such customers. The finding also supports prior research that knowledge sharing promotes employee creativity and performance (Lee, 2018); one of the ways employees demonstrate such creativity is by developing relevant skills, such as competence in serving customers in digital environments. At this point, it is worth noting that the current study’s findings concerning the levels of employee preparedness to handle the pandemic among SMEs in the fashion industry is the first one, as most other studies focused on the readiness of healthcare workers. Therefore, future research should utilise a larger sample size than the one used in the current study because employee preparedness plays a crucial role in SMEs’ resilience, especially in handling uncertainties. Also, it is worth noting that during the interviews, most participants did not demonstrate considerable knowledge on how employees can be prepared during a pandemic. Although the current study’s findings have shown that facilitating knowledge sharing could be an effective solution to this challenge, it can also be hypothesised that future research should explore this subject matter and exploit all the possible solutions while demonstrating their practicality in the context of resource scarcity among SMEs.

Besides, the study’s quantitative findings revealed that the pandemic limited many of the surveyed SMEs’ (50%) access to market information. Besides technological adoption, access to market information is a critical element or outcome of knowledge sharing. In this regard, although sufficient knowledge sharing before the onset of the pandemic facilitated effective adoption of technological solutions during the pandemic, the case was somehow different for access to market information. Therefore, this aspect of market information provides a transitional avenue, moving from before-onset preparation to after-onset preparation. In other words, access to market information is a real-time aspect, meaning prior preparation alone is not sufficient because customer behaviour changed significantly during the pandemic. This argument agrees with LaBerge et al.’s (2020) observation on the significant increment in digital customer interactions. Ratten’s (2020) claims that businesses found it more challenging to predict customer behaviour due to the considerable shifts from pre-onset to post-onset periods. Participation in business events like exhibitions and shows facilitates businesses to gain affordable access to market information. During such events, attendees do discuss current trends in the industry, including customer behaviour. Therefore, it was also imperative for businesses to implement interventions that facilitated knowledge sharing even in the face of lockdowns and curfews and other pandemic-induced barriers. Although most companies reported that they could not participate in knowledge sharing events, others said to have enhanced their resilience through knowledge-sharing. In the qualitative findings section, some of them included participating in webinars and zoom meetings. The businesses that reported sufficient knowledge sharing during the pandemic were also more likely to report successful technology adoption and fewer challenges in access to market information. Also, these findings support prior research on the significance of SMEs’ network capabilities on building their innovative performance (Anser et al., 2020; Majid et al., 2020). In this regard, network capabilities entail not only social media platforms but also interfirm connections, such as meeting in business events, such as shows and exhibitions. Therefore, since the pandemic halted physical meetings, it can also be said that businesses’ network capabilities were significantly reduced as they had to rely on digital platforms alone. Yet, during normalcy, they could depend on both physical and digital interactions. The overall recommendation that can be drawn from this finding is that businesses, particularly SMEs, should always investigate the kind of impact a given crisis has on their ability to participate in knowledge sharing and consequently develop strategies to alleviate identified obstacles. Based on the above observations on improving innovation potential, it can be summarised that the availability of sufficient financial resources before the onset of a crisis and adequate knowledge sharing are key pillars because they facilitate other aspects of innovation potential, namely technological adoption and access to market information to work effectively.

However, little has been discussed about risk-taking. The quantitative part of the study revealed that a considerable number of the surveyed businesses (50%) reported that the pandemic impaired their risk-taking ability. Before discussing the possible solutions to this challenge, it is imperative to start with the underlying mechanism of the causation. On an overall scale, the participants of the quantitative and qualitative parts of the study acknowledged that the pandemic affected the profitability of their businesses, resulting in cash flow problems, creating a situation of resource scarcity. Their claims backed up prior research (e.g., Abu Hatab et al., 2020) that most SMEs based their risk perception on their cash flow and profitability. Therefore, since risk perception is a direct determinant of risk-taking, it can be said that the reduced performance of SMEs due to pandemic-induced disruptions forced them to be more cautious in risk-taking. Also, even though about 50% of the quantitative part of the study participants reported that the pandemic did not significantly affect their risk-taking ability, the interviewees of the qualitative aspect of the study did not offer any meaningful solutions to improving risk-taking effectiveness during a crisis. In other words, no business among those seven utilised in the qualitative part actively engaged in managing risk-taking. Therefore, it can be said that these businesses would have managed to overcome a considerable number of pandemic-induced challenges if effective risk-taking strategies were considered during the pandemic. This situation can as well be linked to limited knowledge sharing during the pandemic. This claim supports Majid et al.’s (2020) definition of network capability, mainly how interfirm networks help SMEs to access crucial information that helps them develop the ability to pursue continuous improvement through change while remaining innovative at the same time (organisational ambidexterity). Majid et al. (2020) demonstrated how SMEs in Pakistan minimise risks associated with resource constraints by forming networks with other firms in the industry. However, the researchers also highlighted that SMEs struggle to create interfirm networks because of proximity challenges, especially those that operate physically. In that regard, it can also be said that SMEs that went online through an eCommerce approach were more likely to develop interfirm networks because they solved the proximity challenges through digital interactions. Therefore, apart from networking, future research should also investigate other specific ways SMEs can mitigate risks during an economic crisis like the Covid-19 pandemic because of limited exploration on this topic domain in the literature. Overall, due to inadequate information on risk-taking, this factor could not be ranked. Hence, so far, it can be said that SMEs focusing on improving their innovation potential should start with enhancing their savings, followed by knowledge sharing, and finally, technological adoption and access to market information. However, risk-taking can easily rank among technological adoption and access to market information because technology adoption and knowledge sharing can help facilitate SMEs’ risk-taking ability. Finally, since the current study aimed to demonstrate how UK SMEs could have improved their resilience through strategic performance, it is also imperative to investigate other ways in which the aspect of strategic performance can be improved at the organisational level.