SumUp surveyed over 900 independent businesses across the UK, Ireland, France, Germany, and Italy to understand how small and medium-sized enterprises (SMEs) are adapting to economic challenges. The findings revealed that increased material costs were the biggest supply chain issue faced by SMEs from all the countries surveyed. Merchants from Germany and Italy were the most affected, with nearly 50% of merchants from both countries (48% of German merchants and 49% of Italian merchants) stating that increased material and delivery costs were the biggest supply chain issue they were facing.

UK businesses also reported rising material and delivery costs as the biggest supply chain problem that they were facing, with 43% of merchants citing it as the most prevalent issue. Similarly, French merchants cited rising costs as the biggest supply chain issue also, with 42% of businesses agreeing with this sentiment. Despite German and Italian merchants feeling the squeeze of tariffs at marginally higher rates, the effects of rising costs emerged as a unanimous issue across countries surveyed.

The study also revealed that increasing supply chain issues are having a knock-on-effect on consumers, with the majority of merchants in every country surveyed revealing that they have had to raise their prices as a result of increased costs. Businesses in Ireland and Germany were the most likely to do so, with 52% of Irish merchants and 47% of German merchants reporting the need for price hikes. This was compared with 43% in the UK, 41% in France, and 40% in Italy.

As economic uncertainty continues to affect businesses across Europe, many are adopting practical steps to avoid excessive price increases; 30% of Italian merchants have tried to expand their services, 18% of French merchants have increased focus on digital sales channels and 20% of UK merchants have invested in marketing or customer retention efforts.

Pierre Lion, Global Director of Enterprise Sales at SumUp, comments: “Supply chain disruption has become a major issue for European businesses. From Berlin to Bologna, Paris to Dublin, independent merchants are facing a perfect storm of rising material and delivery costs – with nearly half of businesses in Germany and Italy reporting this as their biggest supply chain hurdle. These are resilient, adaptable businesses – our data shows they're investing in digital channels, expanding services and finding creative ways to retain customers. However they’re being asked to do more with less. As the backbone of the European economy, employing millions and serving local communities, it is crucial that these businesses receive targeted support to not just survive, but thrive in the face of this ongoing global uncertainty."

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