Barclays Commercial Survey: UK Businesses see Opportunity to ‘Leapfrog’ Competition During Recession

LONDON - A majority of UK businesses view the ability to ‘leapfrog’ struggling competitors as their key opportunity in the current recession, according to new research by Barclays Commercial examining recessionary behaviour amongst established UK companies*.

The Turning the Corner survey, carried out at Barclays Commercial events around the UK, found corporate attitudes remained focused on competition over consolidation as 54% of the 305 business owners and managers questioned viewed the challenges faced by competitors as their key recessionary opportunity, followed by a third (31 per cent) who viewed staff loyalty, retention and productivity as their greatest opportunity during the economic downturn www.barclays.co.uk/commercial/turningthecorner/insight/index.html.

The research also revealed strong evidence that the recession was significantly and permanently transforming the UK economy, with 60 per cent of businesses claiming their organisation has been transformed for good due to the impact of recession, while less than a quarter of companies have continued to operate unchanged.

David Marks, Managing Director of Barclays Commercial Bank in England and Wales, said: “These results show that far from being focused solely on survival, many companies are using this period to make a renewed push for growth and market share.

“We are also seeing a grass roots economic transformation in the UK as businesses change what they produce and how they produce it en mass. This transformation is one that businesses and banks alike are working hard to understand and plan for.”

In an interesting twist on cash flow, it appears late payments (37 per cent) are in fact causing greater pressures than a lack of demand (34 per cent). And in a boost for free trade supporters, only one per cent of business leaders surveyed said protectionism would help their sector through the recession.

Asked when their business would return to a sustained growth phase, 24 per cent claimed they continued to grow, while another 60 per cent envisioned a return to growth within 18 months. Just three per cent of businesses did not expect to return to sustained growth within two years.

Marks said there was further positive news in the findings for the banking industry, as more than a third of businesses pointed to their banks as the single most important resource during the recession, second only to customer base.

“Banks must evolve quickly in the current climate, and with our relationship directors spending 50 per cent more time with their clients and the launch of major initiatives to offer practical advice and support for business operating through the recession, we believe Barclays Commercial is moving in the right direction,” Marks concluded.

Other survey findings include:

- 62 per cent of business owners/managers said they were currently streamlining their business processes to combat recession. - More than a third of UK businesses (35 per cent) are helping their customers to combat recession in order to tackle the recession themselves. - 37 per cent said they are diversifying product and service offerings in order to protect against the recession

The research was conducted as part of Barclays Commercial’s Turning the Corner initiative which combines practical guidance www.barclays.co.uk/commercial/turningthecorner/guides/, workshops, industry discussions www.barclays.co.uk/commercial/turningthecorner/haveyoursay/ and networking events www.barclays.co.uk/commercial/turningthecorner/events/ to offer business owners and managers specific skills and knowledge that will help www.barclays.co.uk/commercial/turningthecorner/helpingcustomers/ them in meeting the unique challenges, and identifying potential opportunities, the current recession presents.

Notes to Editors:

*The study polled the opinions of 305 respondents representing UK businesses with an annual turnover of more than GBP1 million, with representation of businesses with turnover of more than GBP250 million. Businesses were surveyed from a range of sectors, including professional services, manufacturing, construction and hospitality and leisure.

About Barclays Commercial Bank

Barclays Commercial Bank provides relationship banking to 81,000 business customers in the UK (GBP1m to GBP1bn turnover). Customers are served by a network of relationship and industry sector specialist managers who provide local access to an extensive range of products and services, as well as offering business information and support.

Customers are also offered access to the products and expertise of other businesses in the Group, particularly Barclays Capital and Barclaycard. Barclays Asset & Sales Finance - a specialist business within Barclays Commercial Bank - provides customers with asset based lending and leasing solutions.

For further information about Barclays, please visit our websites: www.barclays.co.uk/commercial

www.barclayscommercial.com/turningthecorner

For further Information contact: Ogilvy Public Relations Ben Lock Tel: +44(0)20-7309-1003 E-mail: ben.lock@uk.ogilvypr.com Barclays Press Office John McGuinness Tel: +44(0)20-7116-6058 E-mail: john.mcguiness@barclays.com

Source: Barclays Bank Plc.

For further Information contact: Ogilvy Public Relations, Ben Lock, Tel: +44(0)20-7309-1003, E-mail: ben.lock at uk.ogilvypr.com; Barclays Press Office, John McGuinness, Tel: +44(0)20-7116-6058, E-mail: john.mcguiness at barclays.com