Festive trading a lifeline for small businesses amid rising costs
3-minute read
Over half of small business owners will have to close, put plans on hold, or be forced to find other employment if they don’t have a successful festive trading period this year, according to new research from Simply Business.
The survey of 263 people who own a business or are self-employed in the UK shared their fears, worries, and predictions for their business now and into 2024.
These findings come at the end of another challenging year for small businesses who have been hit harder than most by the ongoing economic instability.
Festive shopping a lifeline for small businesses
Worryingly, 54 per cent of small business owners say they may have to close, pause plans, or find other employment if this Christmas trading period isn’t successful.
The lead up to Christmas is vital for small businesses, with 40 per cent stating that they make more than a fifth of their annual takings during the festive trading period alone.
While trading at this time of year is always important, the economic uncertainty felt across the country more generally only adds to the pressure.
Rising costs and inflation remain key concerns
Small business owners reported their top three concerns right now:
- rising costs and inflation (69 per cent)
- not being able to pay their bills (49 per cent)
- a negative change in consumer confidence and spending (44 per cent)
And we know from our SME Insights Report that 45 per cent of small businesses are planning to focus on marketing over the next year.
Read our advertising tips for small businesses for more information.
Supporting independent businesses is critical
Almost four in five (79 per cent) small business owners have reaffirmed how important it is for consumers to shop locally and support independent businesses over Christmas – two in five (38 per cent) say that it’s ‘absolutely critical’ for the future of their business.
In the short term, a fifth (21 per cent) of small business owners say they will have to scale back their families’ festive celebrations as a result of money being tight.
Caitrin Kincaid, owner of Cube Fun in Northern Ireland, said: “As a kids toy business, Christmas is absolutely crucial in respect of sales, and competing with the big guys within the toy industry is very challenging for a small business owner like me.
“Last Christmas, my small business was severely hindered by the cost of living crisis and the Royal Mail strikes. This year I am relying heavily on Christmas sales to keep the business afloat going into 2024.”
Shoplifting impacts independent retail businesses
The recent surge in shoplifting across the UK is directly impacting independent retailers – half of small business owners have reported shoplifting as a problem.*
The research found that over half (57 per cent) of respondents have lost over £250 to shoplifting this year alone, with almost a fifth (16 per cent) saying they have lost between £1,001 to £5,000.* Naturally, this can disproportionately impact smaller businesses who simply don't have the financial reserves to be able to just write this stock off.
As a result, many small businesses have been forced to implement measures to prevent shoplifting, including:
- enhanced surveillance with CCTV cameras (34 per cent)
- increased staff presence and customer engagement (30 per cent)
- joining forces with other local shops to spot and report a crime (20 per cent)
The additional costs small businesses are facing as a result of shoplifting comes at a time when they are stretched more than ever. And we know from our SME Insights Report that over a quarter (27 per cent) of small business owners are resorting to using personal savings to prop up their business due to the challenges they are facing. Meanwhile, nearly a third (29 per cent) of businesses are seeking bank loans and 23 per cent are seeking a loan from family and friends to support their operations.
Read more: Cost of living support for small businesses
Alan Thomas, UK CEO at Simply Business, said: “Small businesses have been dealt a very challenging hand in 2023, with rising energy costs and business rates limiting growth opportunities for many.
“The festive trading period is a lifeline for many small business owners – four in five stress how important it is to shop locally and support small businesses over Christmas – and we encourage consumers to think about them when doing their shopping this year.
“Small businesses are the lifeblood of our local communities, and with over five million of them in the UK, together they contribute trillions of pounds to the economy. They are quite simply the backbone of the economy and need our support more than ever.”
How are you feeling about your business and the festive trading season? Let us know in the comments below.
Latest news and guides for small businesses
*Data for shoplifting data collected from 69 responses, survey conducted November 2023.
Ready to set up your cover?
As one of the UK's biggest business insurance providers, we specialise in public liability insurance and protect more trades than anybody else. Why not take a look now and build a quick, tailored quote?
Start your quote
Written by
Catriona Smith
Catriona Smith is a content and marketing professional with 12 years’ experience across the financial services, higher education, and insurance sectors. She’s also a trained NCTJ Gold Standard journalist. As a Senior Copywriter at Simply Business, Catriona has in-depth knowledge of small business concerns and specialises in tax, marketing, and business operations. Catriona lives in the seaside city of Brighton where she’s also a freelance yoga teacher.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.
Subscribe to our newsletterInsurance
Public liability insuranceBusiness insuranceProfessional indemnity insuranceEmployers’ liability insuranceLandlord insuranceTradesman insuranceSelf-employed insuranceRestaurant insuranceVan insuranceInsurersAbout
About usOur teamAwardsPress releasesPartners & affiliatesOur charitable workModern Slavery ActSection 172 statementSocial mediaSite mapAddress
6th Floor99 Gresham StreetLondonEC2V 7NG
Northampton 900900 Pavilion DriveNorthamptonNN4 7RG
© Copyright 2024 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.