Royal boost to benefit SMEs as revenues predicted to rise

Three fifths (60 per cent) of small and medium-sized businesses in the UK are expecting a rise in revenues this quarter thanks to a Royal boost from the Bank Holiday celebrations.

That 's according to the latest quarterly Barclays SME Barometer.

On average, SMEs are expecting a 10.4 per cent rise between the months of April and June 2022 against the same period in 2021, with those in the hospitality and leisure sector predicting a 34.7 per cent increase - a bounce back for a sector that had only just opened post-lockdown this time last year.

Despite an increasingly challenging trading environment, the Royal Jubilee is expected to boost independent pubs, bars, and restaurants to the tune of £76 million on Thursday 2 June and Friday 3 June, with 49 per cent of those that are open predicting a sales rise.

This follows a successful first quarter of the year for UK SMEs with more than half (52 per cent) reporting a rise from Q4 2021, and 58 per cent reporting a year-on-year rise in revenue for the same period in 2021.

These figures are supported by data from Barclaycard Payments, which processes one in three debit and credit card payments in the UK.

This data shows a rise of 20.11 per cent in the value and 35 per cent in the volume of payments to SMEs in the same period versus pre-pandemic.

The majority of SMEs (74 per cent) say that rising living costs, energy bills and inflation are a long-term concern for their business.

More than half (51 per cent) worry that the rising costs will negatively impact consumer spending and a quarter (28 per cent) fear it will make them less competitive as they are forced to increase their own prices.

While they remain confident about the future of their businesses, 46 per cent SMEs have a pessimistic outlook on the prospects for the wider UK economy and 41 per cent say that the current business environment is unstable.

Colin O 'Flaherty (pictured), head of SME at Barclaycard Payments, said: “After an exceptionally tough time for the hospitality and leisure sector, it 's encouraging to see that businesses have seen revenues rise over the last few months, despite a challenging economic climate.

“The Jubilee will provide a welcome and much needed confidence boost to many SMEs, as consumers look to celebrate, support local businesses and make the most of the four-day weekend.

“However, it 's not surprising that in the immediate term, cost of living increases, rising inflation and difficulty hiring new workers are a major cause of concern for small business owners. It 's vital that they continue to tap into the support of the wider business community to get through yet another difficult period. ”