Small businesses braced for difficult Christmas
Hopes of a busy Christmas period are low amongst small and medium sized businesses, according to Aviva’s bi-annual SME Pulse.
Nearly half of all SMEs surveyed (45%) said they expect Christmas to be difficult as consumers curb spending, with 10% predicting that it will be "make or break" for their business and less than 20% expecting good sales. In addition, over a third of SMEs (40%) said that 2010 had been tougher than they envisioned at the start of the year, compared with 23% who believe it has been better than expected.
The research also revealed that three out of five small business owners surveyed (61%) expect conditions to "remain difficult" in 2011 and almost a third (30%) believe there is a "real risk" of a double dip recession, with 11% saying that without a change in business conditions, they will cease trading. By contrast, only 17% were optimistic that the economy will improve next year. These findings are almost identical to those from research conducted by Aviva in April 20102 indicating that the majority of SME owners remain downbeat about economic recovery.
David Bruce, commercial product manager at Aviva, said: “Christmas is a crucial trading period, even more so with the VAT rise and government austerity measures hanging over consumer spending for the year ahead. The UK’s small businesses are a resilient community but it looks as though the coming months will test them to the limit.”