With lockdown restrictions continuing to ease across the UK, SMEs predict a 9.8% rise in revenue this quarter, rising to 21% in the hospitality sector, according to new research from Barclaycard Payments.
This marks the highest anticipated increase since the SME Barometer was launched in February 2020.
The research, which polled over 670 senior staff working in UK SMEs, also shows business sentiment is starting to look more positive, at 110 points out of a possible 200, up from a low of 79 points in Q2 2020.
Over half (51%) of SMEs expect an increase in revenues from 17 May, when the next stage of restrictions will be lifted. This is supported by Barclaycard Payment’s acquiring data, which found that hospitality and leisure SMEs saw the number of payments processed up 105% in the last week of April compared to the first week, following outdoor hospitality venues opening from the 12 April.
Over a quarter (29%) of hospitality and leisure SMEs expect to see higher demand between now and 21 June, when most restrictions are expected to be lifted, compared to pre-covid.
This is due to customers being less likely to go abroad (79%), pent up demand after months of lockdown (66%), and visits to hospitality venues to meet up with family and friends (65%).
In addition, hospitality and leisure venues taking reservations are currently booked at half (49%) of their capacity, with 35% expecting customers will need to book at least five days in advance to secure a reservation for mid-June.
Nonetheless, of those who expect lower demand between now and 21 June compared to pre-Covid, 37% expect, after an initial burst, customers will hold back their spending until 21 June. Others are concerned that people now prefer to socialise and eat at home (33%) or will tire of social distancing measures (34%).
However, hospitality and leisure SMEs are prepared for customers once they fully open back up, and have invested in free hand sanitiser (65%), signs to remind customers about social distancing rules (61%), PPE for all their staff (53%) and training new staff or those returning from furlough (38 per cent) ahead of May re-openings when most indoor restrictions lift.
These venues are also looking at ways to increase revenues after a difficult year including increasing prices (21%) and investing in improving outdoor spaces (16%).
Rob Cameron, CEO of Barclaycard Payments, said: “As restrictions lift, it’s reassuring to see the highest level of SME optimism since the SME Barometer launched, with expectations of a long overdue boost for the hospitality and leisure sector.
“With the confidence to plan ahead, small businesses have turned their attention to bulking up their workforce, as well as investing in technology and marketing. We’re looking forward to seeing this confidence translate into sales, and we continue to support small businesses as they further increase their stronghold in the UK economy.”