Yorkshire SMEs could be missing out on opportunities in the final run up to Christmas, because they do not have any plans in place to boost sales, according to new research fromLloyds Bank Commercial Banking.
The study shows that just over a third (37 per cent) of small and medium sized businesses in Yorkshire have introduced a strategy to boost trade and attract customers, despite recognising that rising consumer confidence and better economic prospects mean they could reap significant benefits by doing so.
Additionally, many have a number of concerns for their businesses over the holiday season.
Of those businesses that do not have a specific plan in place, over eight out of ten (86 per cent) Yorkshire SMEs said it is because they do not feel their business needs are affected by the Christmas period; under one in ten (7 per cent) targeted their spend on other periods of the year and one in twenty (5 per cent) said that they had budget and time limitations.
“It is surprising that so few Yorkshire SMEs invest or plan ahead for the busy Christmas period despite the clear business benefits.
“As the economy shows signs of improvement and consumers feel more confident, now is the time for businesses to engage with their customers to understand their business needs and how best to prepare for 2014.”
Although not all businesses have a specific sales plan in place for Christmas, three fifths of all Yorkshire SMEs (60 per cent) have concerns in the run up to the holiday season.
Nearly a third of businesses (30 per cent) are concerned that the bad weather will have an impact on sales; almost a fifth (18 per cent) are concerned about postal delays; and a near equal number (16 per cent) are concerned that they will not be used as much by their customers over the Christmas period.
A further two fifths of Yorkshire businesses (42 per cent) have concerns about the post Christmas period; over a fifth (22 per cent) have concerns about an increase in utility bills; a similar number (19 per cent) fear a drop in post Christmas trade; and just over one in ten (15 per cent) are worried about consumer behaviour.
“Businesses in Yorkshire clearly have certain concerns both in the run up to Christmas and in the post Christmas period.
Whilst it is true that businesses cannot act to prevent many of these situations, the fact is that some advance planning can help to mitigate some of these challenges.”
For those SMEs that do have a plan in place for Christmas, the key tactics they use are extended opening hours (40 per cent); proactive contact with customers to secure orders (36 per cent) client events (28 per cent); and new product launches (20 per cent).
In preparing for the busy Christmas period, two fifths of these SMEs (40 per cent) expect to reap the benefits of increased customer demand. A further fifth (12 per cent) say they have particular products and promotions that work well over Christmas.
Although only a minority of SMEs have made preparations for Christmas trading, the average investment in sales strategies for the holiday season is rising. British Businesses now spend an average of £15,000 on promotions and sales plans, and most Yorkshire businesses have either increased (28 per cent) or held (56 per cent) their investment over the past five years.
However, the extent of businesses’ plans for Christmas vary widely across the sectors. Across Britain, Six out of ten retail businesses (60 per cent) say they have plans in place, as do a similar number (59 per cent) of catering businesses, followed by four out five (45 per cent) leisure companies.
At the other end of the spectrum, only one in ten (11 per cent) finance businesses and just over one in ten (16 per cent) property businesses have any seasonal strategy in place.
Tere is a fairly equal split between those businesses in Yorkshire that plan to close over the Christmas break (45 per cent) and those that will continue to trade (55 per cent).
However this does vary depending on sector, with seven out of ten (71 per cent) construction businesses across Britain likely to close, followed by over two thirds of manufacturing businesses (67 per cent) and just under two thirds of professional services (63 per cent).
In addition four out of ten retail (43 per cent) businesses close during the entire Christmas period as do a fifth (18 per cent) of catering businesses.
For those SMEs that are open during the Christmas period it is business as usual with just one in twenty (5 per cent) hiring additional staff and under a fifth (16 per cent) likely to suspend annual leave.
“Although on the face of it, it is unsurprising that only a minority of firms outside the retail sector have plans in place for Christmas, many may be missing opportunities as a result.
“With the economy showing signs of improving and consumer demand also rising, businesses should think creatively about how they can maximise sales before and after the Christmas trading period.”