A quarter of small businesses in the UK have cancelled staff bonuses, festive parties and gifts to workers and clients this Christmas, a survey has found.
As the cost-of-living crisis bites, 23 per cent of small businesses have slashed or stopped bonuses, 21 per cent have cancelled office parties and 23 per cent have ditched plans for staff and customers to receive Christmas gifts this year, according to a survey by the business spending solutions company, Pleo.
Tightened belts
Businesses of all sizes are having to make savings but the belt-tightening is most acute in companies with between 100 and 249 employees. Last year, these firms spent an average of £13,476 on entertainment. This year, that figure is 24 per cent lower at £10,220.
“This year has been incredibly tough for businesses and what we’re seeing is yet another example of the financial challenges many of our business leaders are facing," James Keating, Chief Marketing Officer at Pleo said. "The Christmas period is usually a time for everyone to celebrate the successes of the past year and look ahead to the next but because of the economic environment, many businesses are putting the brakes on those celebrations.
"We will of course expect businesses to celebrate and reward staff to some degree, but this year in particular will be a little more tempered than what has perhaps happened in previous years."
Accusations of Scrooge-like behaviour on the part of bosses are partly diluted by the fact that nearly half of company senior decision-makers are planning to put the saved money into higher wages, training and travel expenses for staff in the new year.
Meanwhile, the trade body for the UK's hospitality industry is warning that there has been a collapse in Christmas party bookings at restaurants due to the looming rail strikes.
Rail workers are due to go on strike from next week.
UKHospitality said restaurants were reporting cancellation rates of up to 30 per cent which could cost the industry £1.5 billion in revenue.
"A lot of people are saying it’s too difficult to come in, and if you’re writing off next week, you might as well write off the week after, so it’s going to be an early Christmas shutdown,” said Kate Nicholls, chief executive of UKHospitality.
When large proportions of company employees are unable to attend planned Christmas office parties, they tend to be cancelled altogether, restaurateurs complain.
“If you’re having an office do, you want everyone to be there, you can’t just go ahead with only half of the team,” said Will Beckett, co-founder of restaurant chain Hawksmoor.
