New research reveals that confidence among small and medium sized businesses is returning to pre-pandemic levels, with hospitality & leisure SMEs forecasting a revenue boost of 27 per cent in Q3 2021 compared to Q2 2021.
The seventh instalment of the report from Barclaycard Payments, found that 60 per cent of hospitality & leisure SMEs expect an increase in revenue across the August Bank Holiday – the first long weekend post lockdown.
In a sign that the recovery is continuing, 13 per cent anticipate the Bank Holiday weekend will be their busiest in a decade*, with Brits looking to book outdoor space and make dining reservations to socialise with friends and family.
Consumer demand to return to shops, pubs and restaurants has also led 60 per cent of retail and hospitality & leisure businesses to report equal or higher customer numbers than before the onset of the pandemic.
A positive picture
Confidence is improving among SMEs across all sectors, with 90 per cent feeling optimistic or neutral about the prospects for their business. Encouragingly, concern about the impact of the pandemic has dipped to its lowest point since February 2020, while 44 per cent also expect to hire more staff over the next 12 months as the economy picks up.
This renewed positivity is leading SMEs to predict an eight per cent increase in revenue by the end of Q3 2021 (compared to Q2), with transaction data from Barclaycard Payments also supporting this return to growth.
Data taken from the 350,000 small and medium businesses that Barclaycard processes payments for shows that, on average, SMEs have already seen a six per cent increase in revenue in recent weeks, when comparing w/c 12th July (before all restrictions were relaxed in England) to w/c 2nd August (when many further restrictions were lifted across the rest of the UK)**.
The figures are particularly positive for small and medium sized restaurants, pubs and bars, who experienced a 25 per cent increase in year-on-year revenue during the first week of August 2021.
Despite a turbulent 18 months, SMEs have been busy adapting and future-proofing their businesses to ensure they are set-up to respond to changes in consumer spending.
Almost half (47 per cent) of SMEs suggest they have seen improvements in their business operations as a result of changes made during the pandemic, rising to 57 per cent for professional services and 54 per cent for retail SMEs.
When asked what pandemic-driven changes will contribute to their long-term success SMEs cited: local customers spending more as they work from home (20 per cent); the creation of a new website (15 per cent); and providing a click & collect service (8 per cent).
Rob Cameron, CEO of Barclaycard Payments, said: “Small and medium sized businesses hold such a significant position in the UK, accounting for around three fifths of the nation’s employment and half of the turnover in the UK private sector. The success and optimism we are seeing from this segment is an excellent gauge of how the wider economy is performing – and from that it’s terrific to predict that a bumper August Bank Holiday looks set to be on the cards.”
Kate Hardcastle MBE, independent expert, said: “There is a definite confidence in the air when you speak to SMEs. While there are undoubtedly difficulties ahead, I have been encouraged to hear of business owners’ readiness for the rest of the year and a newfound sense of resilience for whatever lies in-store. As we close out the last few weeks of summer, let’s continue to do our bit to help local SMEs and support their recovery in the run-up to Christmas.”
The research, which polled over 664 senior staff working in UK SMEs, finds that overall business optimism is at 55 out of a possible 100 this quarter, up from a low of just 40 points in Q2 2020. This is the joint highest recorded (alongside Q2 2021), since the Barclaycard Payments SME Barometer started in February 2020, before the first lockdown.