Less than half of small retailers in the UK are confident they will grow over the next 12 months, according to the Federation of Small Business (FSB).

A report by the organisation found that 19 per cent of smaller retailer businesses predict they will shrink in size during the same period, while only 47 per cent of retail firms are optimistic about their growth.

The research revealed that late payments could continue to impact the performance of small businesses this year, with the share of companies experiencing this rising from 61 per cent in the third quarter of 2023 to 66 per cent in the fourth quarter of the year.

It found that the proportion of small firms whose late payments worsened over the quarter rose from around a quarter to 35 per cent over the same period.

The FSB also said that due to high interest rates many firms are experiencing issues with the availability and affordability of credit, which has lead them to be more cautious about investing in their businesses.

The report found that among the small firms whose applications for new credit were successful, a third were offered a rate higher than 11 per cent.

“When we look at how small businesses fared towards the end of 2023, it’s hardly surprising that the overall economy also stuttered, with Q4’s poor performance officially dragging the UK into a recession,” said Martin McTague, FSB’s National Chair. “Now the question is how we rekindle growth – and looking at how to kickstart investment and expansion will be a big part of the answer.

“Small firms contain the dynamism and the ambition to grow that will get the economy up and running, if they are given the right conditions to flourish, invest, and make their mark.”

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