SMBs expect to make two-thirds of their yearly revenue over the festive period
LONDON, Nov. 17, 2022 /PRNewswire/ -- Despite the cost of living crisis, new research from Intuit QuickBooks reveals that small businesses (SMBs) expect to cash in from the upcoming festive season. Three quarters (75%) of UK SMBs predict they'll generate more revenue this holiday season compared to 2021, with an estimated revenue of £460K per small business between November and January - equivalent to two-thirds of their total annual revenue on average.
This is supported by 67% of UK consumers who say they plan to spend as much around Christmas or more than they did last year, with an average budget of £671. Small businesses stand out as the go-to destination for holiday gifts as nearly half (47%) agree they offer the best customer service. On average, they plan to spend £250 at SMBs — equivalent to 37% of their total budget.
Cost-of-living realities could threaten festive success
However, growing cost of living pressures could impact this positive forecast, with 8 in 10 (88%) consumers admitting they will cut spending if the economy worsens.
Among UK small businesses, 89% predict inventory or product shortfalls, and 9 in 10 (96%) are experiencing shipping or fulfillment challenges.
Hiring challenges are also an issue; 57% of small businesses are hiring seasonal workers to help them out with anticipated extra demand, but 95% of those with current job openings are having difficulty hiring.
Moving online and offering deals can drive sales in the run up to Christmas
On average, online revenue accounts for 68% (UK) of these small businesses' total annual revenue and over three quarters (79%) of UK small businesses say online sales will be more important during the 2022 festive season than last year.
Over three quarters (78%) of UK consumers also say inflation is pushing them to shop online more, and they are also more likely to buy from small businesses that have their own website. Despite this, only half of the small businesses surveyed in the UK (53%) currently have a busiess website with many using social media marketplaces or third-party e-commerce solutions instead.
In addition, three in five small businesses in the UK (60%) ) don't plan to offer any price promotions this festive season. However, consumers say one of the best ways to get them to spend more money at small businesses this holiday season — both online and in-person — is to offer them special promotions or discounts.
Nick Williams, UK Product Director at Intuit QuickBooks, says: "After yet another challenging year, small businesses will be hoping for a strong festive season to boost their cash reserves. But with recruitment and supply issues, and the potential for consumers to reduce spending should inflation rise further, they need to have a plan. Those businesses looking to make the most of the holiday season will need to fully embrace digital and enhance their online offering to make the most of this opportunity."
"With more and more sales being made online, small businesses could boost online revenue by investing in payment systems. Astonishingly, over a quarter of those surveyed abandoned a sale due to a checkout problem. Strong payment systems can prevent money from being needlessly lost."
Intuit QuickBooks commissioned online surveys, completed in September 2022, of 12,700 respondents in the UK, US, and Canada, comprising 9,700 consumers (adults aged 18+) and 3,000 small businesses (up to 100 employees). In the UK, there were 3,300 respondents: 2,500 adults and 800 small businesses. In the US, there were 7,000 respondents: 5,500 adults and 1,500 small businesses. In Canada, there were 2,400 respondents: 1,700 adults and 700 small businesses. Census data weightings were used to ensure the responses are as representative as possible. The small business sample excludes businesses that do not consider the festive season to be important to their overall annual performance. The majority of the small businesses are product-based (79% in the UK, 76% in the US, 60% in Canada). Their average annual revenues are £709,637 in the UK, $732,00 in the US, C$912,00 in Canada. The average number of employees per business is 27 in the UK, 26 in the US, 27 in Canada. Percentages have been rounded to the nearest decimal place, so values shown in the charts and graphics may not add up to 100%. Responses were collected in online surveys using Pollfish audience pools and partner networks with double opt-ins, random device engagement sampling, and post-stratification to ensure accurate targeting and results. Respondents received remuneration.
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