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Small businesses expect to earn £2,164 less on average this Christmas

2-minute read

Sam Bromley

3 December 2020

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A new Simply Business survey reveals that local shops and businesses are expecting a significant hit to their earnings this Christmas, with one in 10 businesses even fearing closure.

This data emerges as England’s national lockdown ends and the country reverts to a stricter version of the previous ‘tier’ system.

Most local shops and businesses expect to take less money this Christmas

We surveyed small businesses (including cafes, coffee shops, retail shops and pubs) to understand what their plans are for the festive period.

The findings are a stark reminder of the challenges that small businesses continue to face.

With those surveyed telling us that Christmas accounts for 28 per cent of their annual earnings on average, it’s worrying that local shops and businesses expect, on average, to take £2,164 less than usual this Christmas.

Almost one in 10 (9 per cent) expect to take between £3,000 and £5,000 less than usual.

Money was also the biggest fear going into the festive period:

Business worry this Christmas% of businesses
Future lockdowns and being able to open50%
Number of sales and customers47%
Ensuring social distancing18%
Keeping employees on13%

Over two thirds of businesses are worried about Christmas

These money worries are contributing to a general lack of confidence about Christmas. Our survey found:

  • 69 per cent (over two thirds) of small businesses aren’t confident about the festive period
  • one in 10 (11 per cent) even fear permanent closure if their December isn’t successful
  • 32 per cent say they’d need to put plans for their business on hold, meaning an unsuccessful December would be a considerable setback

But confidence depends on the tier

Unsurprisingly, confidence levels differ depending on which tier businesses are in, despite additional government support.

77 per cent of businesses in tier three don’t feel confident, with the strictest tier meaning lockdown in all but name.

Compare this to 57 per cent of businesses in tier two lacking confidence and 24 per cent in tier one, and it’s clear to see how government policy will continue to decide the fate of many small businesses.

Despite being underprepared for Christmas, businesses are rising to the challenge

Because of the most recent restrictions experienced all over the UK, shops and businesses aren’t as prepared for Christmas as usual:

  • over half (54 per cent) haven’t been able to plan or budget
  • over two fifths (46 per cent) haven’t been able to attract or market to new customers
  • almost one third (28 per cent) haven’t been able to order stock
  • over a tenth (12 per cent) haven’ been able to hire extra staff to help with the festive period

But even though businesses haven’t been able to plan, they’ve pivoted and made changes to put themselves in better stead for the period:

Business pivot% of businesses
Increase in advertising28%
Set up an online delivery service18%
Set up an online store14%
Offering a takeaway service13%
Offering click and collect services11%

Simply Business is backing customers to shop local this Christmas

This Christmas, we’re encouraging as many people as possible to shop with local small businesses.

That’s why we’re giving away three £100 Not On The High Street Vouchers – all you need to do is share your support for local businesses on social media before 14 December.

Here's how to be in with a chance of winning:

1. Head over to any of our #SBShopsLocal posts on Facebook, Twitter or Instagram

2. Follow the simple instructions set out in each post!

See the terms and conditions for our Facebook giveaway, Twitter giveaway, and Instagram giveaway

The giveaways are open to UK residents (except N.I) aged 18 and over, with internet access and an active account on the relevant social media platform.

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We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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