UK Small Businesses Eye Strong Christmas Trade

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UK small and medium-sized businesses have reported rising confidence levels, with new payment data showing transactions are above where they were in the same period just before the pandemic.

Barclaycard reports their data show quarterly SME transactions to have risen by 38.1% when compared to the same period in 2019, as Christmas shopping gets underway.

Rising confidence amongst small & medium business owners sees 29% of respondents to a regular survey carried out by Barclaycard expecting their most successful festive period since 2015.

Confidence and future trading expectations would nevertheless be stronger were businesses not constrained by rising inflation expectations and bills, shows the report.

54% of UK SMEs anticipate revenues to increase in the fourth quarter of 2021, compared with performance in the third quarter.

Barclaycard Payments processes £1 in every £3 spent using credit and debit cards in the UK and services over 350K SMEs.

The survey shows that in the three months up to 31 October, transaction volumes among this group were up 38.1% versus 2019.

Year-on-year payments volumes are showing strong growth – up 21.9 % across the board – with the retail, food & drink and leisure & entertainment sectors benefitting from 15.58%, 27% and 54% uplifts respectively.

Business owners anticipate a rise in revenue on an expectations that Christmas gatherings will be larger this year now that restrictions have been lifted.

The report finds the majority of businesses also remain relatively confident (56%) in the resilience of their supply chains, despite a small decline in sentiment compared to Q3 2021 (59%).

71% have put measures in place to limit the impact of supply chain challenges, which includes 85% of retailers when looking at specific sectors.

The same survey finds the longer-term outlook for SMEs "appears promising".

31% say the pandemic and associated restrictions was their greatest challenge of the last year, looking forward into 2022, just 11% expect this to remain the most significant barrier to performance, while 9% cite access to talent as a significant obstacle they expect to experience.

54% believe the pandemic has helped future-proof their business and made them more resilient, as many look to invest in the year ahead.

36% plan to hire more staff, with businesses in Wales (47%) being the most active in their recruitment drive.

A further 29% intend to upgrade their technology and 22% will extend their product range.