- Nearly half (47%) of small and medium-sized enterprises (SMEs) grew their customer base during the Covid-19 pandemic thanks to adaptations made to stay open1
- However, despite finding ways to survive the pandemic, only one in five (19%) affected businesses expect their operations to return to pre-Covid-19 levels in 2020
- Three quarters (77%) of consumers feel that the pandemic has shown them that Britain would be worse off without SME businesses2
- Santander launches a new business support programme, ’Survive and Revive’ to help businesses prosper during the recovery and beyond
New research from Santander UK reveals that a third (32%) of the UK’s SMEs who implemented changes plan to make their Covid-19 adaptations a permanent feature post-pandemic as almost half found they not only survived, but actually grew their customer base during Covid-19. The study – which polled 2,050 senior leaders in UK SMEs – suggests that the pandemic has driven long-term change to the way businesses operate.
Over half (57%) of SMEs adapted and changed the way they do business as a result of Covid-19 and half (51%) now plan to completely rethink their long-term business strategy moving forward. Introducing alternative operating hours was the most widely implemented operational change, with almost one in five (18%) business leaders taking this step. Moving their business online (14%) and changing products or services (13%) were also methods used to ensure business continuity during Covid-19. But over a third (36%) of SMEs said they would not be ready to face any other challenges or future crises until they had dealt with Covid-19, and only one in five SMEs expect their business to return to operating at pre-Covid-19 levels in 2020.
Kenny Tutt, owner of Pitch restaurant and winner of MasterChef 2018 said: “Like many small business owners I put my heart and soul into my business, and it has been a struggle to overcome the impact of Covid-19. Without help from the government and lenders, I, like many businesses may not have pulled through.
“But difficult situations can force positive change. From designing a new take-away suitable menu, through to social distancing measures, we have adapted to create a relaxing and enjoyable experience for guests. I’ve been taking what I learnt during Covid-19 to develop a new business plan, and while there are still many uncertainties, with the right support, more businesses can hopefully find a way forward as lockdown eases.”
Santander’s study showed that businesses were quick to respond to the pandemic, with over seven in ten of those who adapted bringing in their changes before the end of March 20203. Looking ahead, of the SMEs who rethought their long-term business strategy due to Covid-19, over a quarter (28%) say their business will be more online. One in five (20%) plan to occupy less physical space, as almost a third (29%) plan to have their staff working more remotely in future. More drastically, one in seven (16%) say they will look to re-purpose their business completely.
The efforts of SMEs have been well received by the public, as a separate Santander study of over 2,000 UK consumers found that 60% want SMEs to keep the changes they made once the pandemic is over. In a boost for smaller businesses, over three quarters (77%) of consumers feel that the pandemic has shown them that Britain would be worse off without SME businesses.
Small business recovery and outlook
Despite the innovations of SMEs helping them to survive the pandemic so far, over half of SME leaders (58%) have reported a decline in their profits and revenues, which suggests that despite attracting new customers, consumers have been spending less with them.
Santander found that a third of SME leaders feel anxious about the future of their business with only a fifth (19%) expecting to return to normal operating levels by the end of 2020 and almost a third (32%) by July 2021. One in ten SMEs in the West Midlands never expect their business operations to return to pre-Covid-19 levels. Meanwhile, businesses in Northern Ireland are more hopeful with over a third (36%) expecting to return to normal before the end of 2020.
The majority (60%) of leaders at SMEs are worried about their ability to attract customers back as the economy re-opens, with nearly a fifth (18%) concerned about the level of investment in marketing needed to restore customer spending to pre-Covid-19 levels.
The findings come as Santander launches a new business support programme, ‘Survive and Revive’ designed to help businesses transition successfully out of the lockdown and ensure they have the capabilities and tools to prosper in a post-pandemic environment.
Susan Davies, Head of Business Banking, Santander UK, commented: “SMEs are the backbone of the UK economy, and now more than ever, are proving to be invaluable to the local communities in which they serve. With many adapting, almost overnight to survive, we are proud to have helped them on their journey through the provision of more than £3 billion in Bounce Back Loans. Now with the launch of our new business support programme, we hope to continue to help small businesses as we emerge from lockdown and look to the future.”
More information on Santander’s ‘Survive and Revive’ programme, including our webinars and a list of other helpful resources is at www.santanderbreakthrough.co.uk/coronavirus.
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Notes to Editors
1. Research is drawn from a survey conducted by Opinium research between the 10th - 19th June 2020. The base size was 2,050 UK adults who are senior managers and those above who are responsible for decision making in SMEs.
2. Research is drawn from a survey conducted by Opinium research between the 9th - 11th June 2020. The base size was 2,003 UK adults, and was weighted to be nationally representative.
3. Lockdown was introduced in UK on 23 March 2020.
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. At 30 December 2019, the bank had around 23,500 employees and serves around 14 million active customers, via a nationwide branch network, telephone, mobile and online banking. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers’ eligible deposits are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
Banco Santander (SAN SM, STD US, BNC LN) is a leading retail and commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful presence in 10 core markets in Europe and the Americas, and is one of the largest banks in the world by market capitalization. Its purpose is to help people and businesses prosper in a simple, personal and fair way. Santander is building a more responsible bank and has made a number of commitments to support this objective, including raising over €120 billion in green financing between 2019 and 2025, as well as financially empowering more than 10 million people over the same period. At the end of the first quarter of 2020, Banco Santander had a trillion euros in total funds, 146 million customers, of which 21.3 million are loyal and 38.3 million are digital, 11,900 branches and 195,000 employees. Banco Santander made underlying profit of €1,977 million in the first quarter of 2020, an increase of 1% compared to the same period of last year.
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