Around a third (35%) of businesses expect to grow this year, according to new research by the British Chambers of Commerce, in partnership with Royal Mail. The results show hope for growth lies largely in the domestic market, with online expected to drive sales.
Over the next 12 months, 41% of respondents are planning for ‘business as usual’, 22% plan to downsize, and 2% expect to cease operations.
Of the 1,200 businesses surveyed earlier this year, before the national insurance hike and US tariffs, 91% were SMEs (fewer than 250 employees).
Urban based businesses were most likely to expect growth, at 36% compared with 29% of rural businesses. The survey also shows domestic demand is expected to be the top driver of growth, with 38% of responding businesses rating it as a driver. A further 22% see international customer demand as a driver.
The research highlighted the early signs of SMEs adopting AI, with 1 in 5 businesses (18%) saying new technologies will help them drive growth.
The research also revealed that trends for increased web sales continue to grow, with businesses who sell partly online saying they expect their proportion of digital sales to increase by more than a quarter from 20% to 26% in the next three years.
Among consumer facing businesses, the percentage of online sales is expected to increase from 31% to 38%.
Shevaun Haviland, Director General of the British Chambers of Commerce said: “This is undoubtedly a challenging time for businesses, but our research shows some glimmers of hope. Strong domestic demand, powered by online sales, can help UK firms grow over the coming months.
“We know that when businesses have the right technology, and logistic support, the pathway to growth is clearer. We’re continuing to urge policymakers to improve digital and transport infrastructure to break down barriers, particularly for SMEs.”
Emma Gilthorpe, Chief Executive of Royal Mail, said: “The growing trend for shopping on marketplaces and savvy social media marketing mean consumers are moving online more and more.
“SMEs can take advantage of this, but to compete with larger companies they need to offer customers the same convenience at checkout, including choice of payment and delivery options. We will be increasing our support for SMEs to help them reach as many customers as possible in this challenging environment.”
What businesses say:
“Expansion of online sales and increased automation will provide opportunities for growth. That includes sourcing local suppliers, diversifying business operations to offer full end to end service including design and manufacture.”
West Cheshire & North Wales Chamber member
“We now live in a world where there is a screen between us and the consumer. Therefore, there is a need for authentication when engaging in this way – but people still enjoy buying directly with people.”
Ayrshire Chamber member
“Technology is where the insight is going to come from in the future – so firms need to invest in tech before massive changes come.”
