Shopping with small and local businesses has never been more important with almost one third (31%) of the UK’s SMEs relying on the Christmas period to help them survive, according to new research released by Nucleus Commercial Finance.
The research found that one in five (20%) SMEs are anticipating a challenging Christmas trading period – comprising of 18% who think their businesses will suffer over the season, and 2% who believe they will have to close.
While the Christmas season is traditionally one of the busiest times of year for SMEs, the economic impacts of the pandemic mean SMEs are anticipating cut-backs in consumer spending this year with 69% foreseeing a reduction. This may indicate tougher times ahead for SMEs, and, in particular, those who rely on footfall to drive business.
But there may yet be hope for those businesses who have been able to – or are in the process of – integrating digital channels into their businesses models, with 80% of SMEs surveyed believing more shoppers will go online this year, while 41% anticipate an increase in customers shopping with them via online channels in the run up to Christmas.
Despite the looming leanness of the festive season and uncertainty into 2021, almost a third (30%) of SMEs also anticipate a boost in business as a result of shoppers staying local, with 11% believing they will be able to flourish over the next few months and start the new year in a good position.
Chirag Shah, CEO, Nucleus Commercial Finance, said: “2020 has been a year of disruption for people and businesses globally. Here in the UK, we’ve seen remarkable resilience as a result of both government support and the mettle of our SME landscape. The Christmas season ahead will undoubtedly reflect the economic challenges we’ve collectively faced this year, but I am pleased to see some optimism about people choosing to shop locally and support their communities.
“SMEs are vital to the UK economy, so it is crucial we keep supporting them. Adaptability has been key this year – and we are likely to see those businesses who have been able to flex their models to accommodate lockdown restrictions and a need for online channels really reap the
rewards this Christmas. And while the road ahead may be rocky, this gives the alternative lending space a chance to step up and demonstrate both commitment and support to our SMEs.”