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Barclaycard data suggests strong festive trading period as payments volumes rise

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LONDON, ENGLAND - DECEMBER 14: A man carries shopping bags on New Bond Street on December 14, 2009 in London, England. High street stores are expecting a bumper Christmas this years despite the economic dowturn, with shoppers spending around GBP £120 million in the past two days alone. (Photo by Dan Kitwood/Getty Images)

Barclaycard Payments’ data shows that SME transactions in the UK have risen by 38.1% compared to 2019 as Christmas shopping gets underway.

The data, released today, went on to detail how business owners are starting to feel more optimistic about their own performance too. Almost three in 10 said they are expecting their most successful period since 2015.

Despite this, concerns about inflation and rising bills are having a broader impact as confidence in the wider economic outlook has dipped, with 64 per cent feeling neutral or optimistic about the UK economy, down from 76 per cent in Q3 2021.

The quarterly SME Barometer combines billions of merchant transactions, processed by Barclaycard Payments, with research data to provide an in-depth look at the UK SME economy

Over half (54 per cent) of UK SMEs are expecting revenues to increase in Q4, compared with performance in Q3 2021.

As the Christmas shopping rush gets underway, data from Barclaycard Payments, which processes £1 in every £3 spent using credit and debit cards in the UK and services over 350,000 SMEs, shows that in the three months up to 31 October, transaction volumes among this group were up 38.1 per cent (versus 2019)*.

Encouragingly, following last year’s restrictions, the research also shows that almost three in 10 (29 per cent) SMEs predict the upcoming festive trading period will be their most successful since 2015.

While consumer confidence has declined against a backdrop of inflation and rising utility bills, business owners which anticipate a rise in revenue attribute this to: an expected boost in sales as they believe Brits will be having larger celebrations after spending Christmas 2020 apart from many of their families and friends (25 per cent), an increased preference for small businesses among shoppers (14 per cent) and customers choosing to spend more with small businesses (10 per cent).

The majority of businesses also remain relatively confident (56 per cent) in the resilience of their supply chains, despite a small decline in sentiment compared to Q3 2021 (59 per cent).

Reassuringly too, as Christmas shopping peaks, over seven in 10 SMEs (71 per cent) have put measures in place to limit the impact of supply chain challenges, which includes 85 per cent of retailers when looking at specific sectors.

On the data, Colin O’Flaherty, Head of Small Business at Barclaycard Payments, said: “It’s encouraging to see that small and medium businesses are feeling positive about their performance ahead of the festive period.

“While the overall economic backdrop remains challenging amidst rising prices, slowing economic output and muted consumer confidence, UK SMEs continue to impress me with their resilience and their focus on controlling what they can control to meet the needs of their customers as they’ve weathered the ups and downs of the past 20 months.”

Adding: “While there may still be challenges that lay ahead, the data from our Barometer indicates SMEs are right to feel cautiously optimistic about the prospects of their own business as they head into 2022.”

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