Nearly half (46,5%) of small and medium enterprises (SMEs) surveyed in the latest SME Confidence Index by Business Partners Limited indicated that seasonal trading had no significant impact on their business performance, with a further 8,1% reporting a negative impact. Against the backdrop of Stats SA reporting that retail sales reached R117,9 billion in November 2025 – a 3,6% increase compared to the previous year – feedback from SMEs indicates that the benefits of seasonal trading are not evenly distributed across all sectors.
“While seasonal trading periods such as Black Friday and the festive season provide a boost for some South African small businesses, their impact is more modest and uneven than one might think,” says Jeremy Lang, Managing Director at Business Partners Limited. “The findings of our quarter four index suggest that seasonal demand alone is not a guaranteed driver of meaningful performance and financial gain for SMEs, particularly in the context of constrained consumer spending and rising operating costs.”
Energy stability emerges as a key driver of recovery
In contrast to the mixed impact of seasonal demand, improved electricity reliability in 2025 delivered more consistent and meaningful relief for SMEs. When asked how reduced loadshedding affected their operations, nearly three-quarters (73,4%) of SMEs reported an improvement.
“The significant reduction in load-shedding during 2025 enabled more predictable operating hours, reduced reliance on costly backup power, and supported improved productivity,” says Lang. “For many businesses, energy stability has shifted from a short-term crisis management concern to a foundation for operational recovery and forward planning.”
These findings suggest that structural improvements, particularly in electricity supply, are having a more sustained impact on SMEs than seasonal trading. “While festive demand remains relevant, businesses need a stable operating environment to unlock growth and manage costs effectively,” says Lang.
Confidence rebounds quarter-on-quarter
The Q4 2025 results reflect a gradual recovery in SME confidence following a weaker third quarter. Confidence that businesses will grow in the next year increased to 81%, up 2 percentage points (pp) from Q3, although still 3 pp lower year-on-year. Confidence that the South African economy will be conducive to business growth rose more sharply to 69%, up 5 pp quarter-on-quarter and unchanged year-on-year.
Confidence in improved access to finance climbed to 65%, while confidence in finding suitably skilled staff increased to 73%, both showing gains compared to the previous quarter and modest improvements year-on-year.
Other indicators remained relatively stable. Confidence in labour laws being conducive to business growth edged up by 1 pp to 59%, while confidence in government support for SMEs declined slightly (down 2 pp) to 47%. Encouragingly, confidence that clients will pay within stipulated timeframes improved to 73% (up 5 pp), reversing some of the pressure seen in the previous quarter.
Support mechanisms gain importance, yet challenges persist
Confidence in private sector support for SMEs increased marginally to 55% (up 1 pp), although it remains slightly lower than the same period last year. SMEs continue to place strong emphasis on access to finance and support structures as key enablers of growth. The importance of access to finance rose to 87%, the importance of access to SME-specific information increased to 87%, and the importance of mentorship rose to 86%, reflecting growing recognition of the value of guidance and support in navigating an increasingly complex business environment.
While confidence has improved, the persistent challenges of cash flow, economic conditions and crime continue to hinder the operating environment for small businesses.
“Overall, the data presents a balanced picture,” says Lang. “SMEs are still under pressure, particularly as seasonal trading did not deliver the uplift many would have been hoping for. However, there are clear signs that greater stability – particularly in critical infrastructure like electricity – is helping to unlock renewed optimism and lay the groundwork for more sustainable growth in 2026,” he concludes.