SMEs are increasing their investment in protective measures for both customers and staff as they remain cautiously optimistic that the summer will bring a boost to trade, according to research by Recognise, the UK’s newest SME bank.
Almost a third (30%) of smaller firms told Recognise they would be spending on PPE or protective measures for staff, while one in five (22%) of SMEs said they would be investing in protective measures for customers.
Overall, nearly eight out of ten (78%) SMEs said they were confident of a boost in business in the summer if Covid restrictions were removed completely, an 11-percentage point increase on the 67% of smaller businesses who said they were confident of a seasonal uplift when questioned by Recognise in March this year.
Confidence is highest in the retail sector, one of the areas most impacted by lockdown measures, with 86% of smaller retailers telling Recognise they are confident of increased trade in the summer, compared with 60% in March.
But Covid is still causing concern for smaller businesses. Recognise found that over a third (37%) of SMEs said they were concerned that restrictions, such as social distancing, could hamper trade or reduce customer numbers. The figure increased in the hospitality sector where more than half (52%) of SMEs said they were worried that continued restrictions would dampen business.
Less than a third (30%) of SMEs said they were worried that customers would be too afraid to shop or do business with them because of the fear of catching Covid-19, compared with 20% in March.
As a result, many SMEs are increasing their spending to ensure they can make the most of summer trading, whatever the circumstances. Recognise found:
- 41% of SMEs in the hospitality sector had already, or said they were planning to invest in outside seating
- 35% of all SMEs said they would be investing in new equipment including IT, up from 22% in March
- 30% of smaller firms said they would be spending on PPE or protective measures for staff, up from 25% in March
- 22% of SMEs said they would spend on PPE or protective measures for customers, up from 20% in March
However, previous concerns around the long-term impact of Covid lockdowns on business seem to have diminished. The number of smaller firms worried about replacing customers lost during lockdown has fallen to 20% (down from 26% in March), while worries that customers will have taken their business elsewhere have dropped to 14% of all SMEs (compared to 18% in March).
According to Jason Oakley, CEO of Recognise, the latest findings reveal the resilience of the UK’s SME sector. He explained:
“SMEs remain cautiously optimistic that business will continue to improve as we get closer to the summer. If that means continuing to operate within certain restrictions, you can be certain they will adapt their businesses to welcome as many customers as possible.
“This can-do attitude is shown by the growing number of SMEs planning to invest in their businesses in readiness for the summer. While expenditure on protective equipment is to be expected, higher spending on marketing and promotional activity suggests that smaller businesses are coming out of lockdown with ambition and plans to win customers.”