Half of SMEs fear 'difficult' Christmas

HOPES of a busy Christmas are low among small and medium sized companies (SMEs) as consumers limit their spending in the current economic climate, according to a report today.

By The Newsroom

Published 26th Nov 2010, 09:07 BST

A survey of 500 firms by insurance giant Aviva found that almost half expected the festive season to be "difficult", with one in 10 predicting it will "make or break" their business.

Fewer than one in five expected strong sales in the coming weeks and a third said 2010 had been tougher than they expected.

Almost one in five firms cut staff pay or hours this year while there was a big increase in those taking on temporary staff.

David Bruce, commercial product manager at Aviva, said: "Christmas is a crucial trading period, even more so with the VAT rise and government austerity measures hanging over consumer spending for the year ahead.

"The UK's small businesses are a resilient community but it looks as though the coming months will test them to the limit."