Happy Christmas as businesses confidence rises 

Over half of SMEs are expecting revenues to increase in the final quarter, compared with the previous period. Yet concerns about inflation and rising bills are having a broader impact, with 64 per cent feeling neutral or optimistic about the UK economy, down from 76 per cent.

As the Christmas shopping rush gets underway, data from Barclaycard Payments, which services over 350,000 SMEs, shows that in the three months up to October 21, transaction volumes among this group were up 38.1 per cent on the previous year.

Encouragingly, following last year’s restrictions, the research also shows that almost three in SMEs predict the upcoming festive trading period will be their most successful since 2016.

While consumer confidence has declined against a backdrop of inflation and rising utility bills, business owners which anticipate a rise in revenue attribute this to an expected boost in sales as they believe Brits will be having larger celebrations after spending Christmas 2020 apart from many of their families and friends, an increased preference for small businesses among shoppers and customers choosing to spend more with small businesses.

The long-term outlook appears promising. While three in 10 say the pandemic and associated restrictions was their greatest challenge of the past year, looking forward into 2022, just 11 per cent expect this to remain the most significant barrier to performance, while almost one in 10 (9 per cent) cite access to talent as a significant obstacle they expect to experience.

More than half of SMEs (54 per cent) believe the pandemic has helped future-proof their business and made them more resilient, as many look to invest in the year ahead.

UK SMEs continue to impress me with their resilience and their focus on controlling what they can control to meet the needs of their customers

A family run business who has successfully responded to changing consumer behaviour as a result of the pandemic is TH Burroughs farm shop in Swindon. From introducing new products in the run up to the festive period, to creating a popular Christmas savings club, this local business has gone from strength to strength.

As Covid-19 encouraged shoppers back to their local high streets, they managed the extra demand by increasing permanent employees, and taking on an apprentice.

Owner Graham Burroughs said: “Our business always grew by word of mouth, but since the start of the pandemic, our trade increased significantly. Footfall almost trebled as customers returned to small businesses – and nearly two years later we have seen regular repeat customers from the local community.

“As a seller of local produce, we are not overly concerned with the current supply chain issues, and are confident that with our suppliers, our customers will have the produce they need this Christmas.”

Colin O’Flaherty, Head of Small Business at Barclaycard Payments, said: “While the overall economic backdrop remains challenging amidst rising prices, slowing economic output and muted consumer confidence, UK SMEs continue to impress me with their resilience and their focus on controlling what they can control to meet the needs of their customers as they’ve weathered the ups and downs of the past 20 months.”

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