We spoke about 2011's Panda update here and the benefits that it brough the majority of you and we think the 2012 update will also be beneficial.
Named 'Venice' the main thrust of the update focuses on promoting local searches even if you don't localise the search yourself! This article covers it in more detail but in essence it will try to match up a user's location with the location of the results of the search string.
Example: My location in set to Sheffield (without signing in to Google) If I then search for 'office cleaning companies' any company with a sheffield location will now be promoted within the results.
For the majority of you this is good thing as your 'A' grade clients tend to be those within your immediate area where you can offer a face to face service or lower transportation costs for your goods. There is a small drawback if you are competing for national business as you may now lose out on organic searches to rival companies better located for that user. We'd suggest that you continue to add content aimed at long tail, niche phrases where the locality search won't be as effective (as those people will not have targeted that phrase!)
In conclusion we see the Venice update as another positive move by google in their attempt to give the best results to the user and following their mantra of giving the user 'exactly what they want'