SMEs anticipate Xmas hit
Nov 11 2011
Many companies do not foresee strong Christmas sales
Some 78 per cent of businesses expect their turnover to either take a hit or stay the same over the Christmas period, research finds.
Two in five companies (37 per cent) also expect their profit to drop, with 41 per cent expecting it to stay the same, according to a study of 351 small businesses by Opinium Research.
To counteract the disappointing forecasts, businesses expect their net marketing spend to increase by an average of 18 per cent. Some 87 per cent of companies predict their number of employees to remain constant across the board during the Christmas period.
James Endersby, managing director of Opinium Research says, 'There are 4.5 million small businesses in the UK, and the figures suggest they are expecting a very tough Christmas. The next few weeks are looking to be a test with profit and revenue predictions falling across the board. With performance looking worse, there may be a few casualties coming up.'
James Meekings, director at online borrowing portal Funding Circle agrees that retailers seem to be cautious about Christmas demand, but points to evidence that there are still buoyant, strong businesses investing for growth from the New Year. 'Despite the nervousness within the retail sector, other buoyant sectors have driven a high volume of demand for expansion capital. In fact, 42 per cent of our loans have been for this purpose, showing clear evidence that it’s not all doom and gloom.'
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