SMEs to raise prices for customers as costs rise – Premium Credit

SMEs are most likely to raise prices for customers amid energy bill-linked financial pressures, highlighted the latest Premium Credit Insurance Index, published today (8 November 2022).

Results from the research showed that 23% of surveyed SMEs would increase prices to recoup rising costs – compared to 17% that will opt for lower pay rises and not replacing staff who leave.

However, 4% of SMEs feared they would have to stop trading and a further 8% reported that jobs would be cut to keep business costs under control.

The largest proportion of surveyed respondents (38%) said they did not know how they would address the issue of rising energy bills. 

Respondents that said they would choose to cut back on investing in their businesses sat at 11%, while 13% said they were postponing plans for expansion.

Around one in eight (12%) said they would run down company savings to afford bills.

Premium Credit’s chief sales officer Owen Thomas said that “SMEs are showing remarkable resilience in how they cope with rising energy bills, but it is worrying that so many do not know how they will address the issue”.

Outreach

In terms of business operations, 15% of surveyed SMEs reported that remote working would be considered if possible, while 12% will cut back on buildings or office space and 5% will shut parts of the business.

Premium Credit’s Insurance Index also found that more firms were turning to credit to be able to afford insurance cover.

Thomas continued: “Our focus is to ensure our partners offer finance every time to their customers and we work together to present a compelling finance option through a seamless experience.

“Our existing support for vulnerable customers is tried and tested and we are reviewing what additional support is appropriate during this time of uncertainty.”

Research for Premium Credit’s Insurance Index saw Consumer Intelligence survey 681 SME owners and managers during September 2022.