Anticipating the Festive Season: Mixed Feelings Among Small Business Owners

by Michael Nguyen
Holiday Sales Small Business

The upcoming holiday season projects to be robust for small businesses across the United States, yet there’s a palpable sense of apprehension among the proprietors as they approach the final months of the year.

Their clientele has a significant role to play in both the optimism and concern felt by these entrepreneurs.

Americans sustained robust spending habits through the summer months, as evidenced by a 4.9% GDP growth in the third quarter, reported by the government. However, despite these open wallets, there’s a prevailing sense of financial gloom among consumers. This sentiment was captured in a recent AP-NORC survey that highlighted widespread worries about future financial prospects among U.S. households.

Small business owners, who witnessed a surge in sales spurred by the pandemic, now harbor fears that consumers may have depleted their extra savings from that period and could either reduce their spending this festive period or revert to online shopping, having initially returned to support brick-and-mortar establishments. Adding to their concern is the persistent inflation, elevated interest rates, and the unpredictable nature of weather conditions.

Max Rhodes, the CEO of Faire, which operates as an online wholesale marketplace utilized by numerous small retailers for inventory procurement, acknowledges this uncertainty. “Retailers are facing a climate of hesitation,” he commented. “The interplay of steep inflation and the uptick in interest rates is instilling a sense of trepidation in consumers, which, in turn, transfers to retailers. It’s an unusual economic situation; the figures are encouraging, yet the overall sentiment remains skeptical.”

Rhodes noted an earlier-than-usual spike in searches for “Christmas” items on his platform, indicating a shift to earlier inventory stocking by retailers to mitigate supply chain delays and ensure product availability for the entire season.

For many shopkeepers, the holiday season represents a substantial portion of their yearly revenue. The National Retail Federation forecasts a 3% to 4% rise in holiday sales for 2023. This growth, while positive, will be slower in real terms due to a moderation in inflation rates, compared to the 5.3% increase seen in the previous year.

Initial sales patterns are mirroring those of past holiday seasons, with customers engaging in spending that offers a respite from their fiscal concerns.

Retailers are noting a trend in the sale of “comfort” items such as luxury candles, adult plush toys, particularly the Jellycat brand, glittering objects including disco balls, and products related to Barbie and Taylor Swift.

“We are championing the ‘bright future’ trend,” stated Rick Haase, proprietor of Patina gift shops in Minnesota. “The current trend reflects a desire for joyful escapism and items that bring positivity into people’s lives amid global uncertainties.”

In Brooklyn, New York, Measure Twice reports an upswing in sales of higher-priced candles. Kimberley Yurkiewicz, the store’s owner, remarked on the challenges of analyzing sales amidst ongoing disruptions such as COVID, fluctuating tourism, and looming recession fears. “True, regular, and normal figures are elusive,” she shared. “The complexity of the situation makes it difficult to determine what baseline sales should look like.”

Andy Wilkerson, co-owner of Blackhawk Hardware in North Carolina, experienced a surge in sales during the previous two years, driven by consumers investing in outdoor decorations. With the return of in-person gatherings, there’s a notable increase in customers purchasing indoor decorations and table settings. Wilkerson finds the steady sales performance reassuring, especially given the abnormal boost in recent years.

Heather Haynie of Rock Paper Scissors in Virginia, having witnessed exceptional holiday seasons in 2021 and 2022, is concerned about her customers being enticed by deals from larger online companies like Amazon. The NRF predicts a 7% to 9% growth in online and non-store sales this year.

Sierra Wallis, owner of the Sq/Ft gift shop in Georgia, reflects on the paradox of increased business activity yet lower spending per customer. The holiday season is critical, accounting for two-thirds of annual sales, which drives her strategy to order all holiday inventory early with hopes of selling out by mid-December.

“We are optimistically cautious,” Wallis concluded. “Every year the sales targets seem daunting, yet somehow, we manage to meet them.”

Frequently Asked Questions (FAQs) about Holiday Sales Small Business

How is the economic outlook for small businesses in the upcoming holiday season?

The economic outlook for small businesses during the upcoming holiday season appears promising, with projections indicating a 3% to 4% increase in holiday retail sales. However, small business owners are facing a mix of optimism and concern due to varying consumer spending patterns and broader economic challenges such as inflation and interest rate hikes.

What are the main concerns of small business owners as the holidays approach?

Small business owners are concerned that consumers may have exhausted their pandemic savings and might reduce their spending or opt for online shopping, despite the previous trend of supporting local businesses. Inflation and higher interest rates also contribute to the anxiety of both consumers and business owners, creating a climate of uncertainty.

What are some of the popular items consumers are buying for the holiday season?

Consumers are showing a preference for “comfort” items, such as high-end candles, plush stuffed animals for adults (notably the Jellycat brand), disco balls, and merchandise related to Barbie and Taylor Swift. These purchases reflect a trend towards items that offer a sense of joy and escapism.

How are supply chain issues affecting small businesses during the holiday season?

Some small business owners, learning from past supply chain challenges, are ordering inventory earlier than usual to avoid bottlenecks and ensure product availability throughout the season. Early stocking also provides the opportunity to reorder popular items that sell out.

What is the impact of online shopping on small businesses during the holiday season?

Online shopping poses a significant competitive challenge for small businesses, especially as larger online retailers like Amazon offer enticing deals. The National Retail Federation anticipates a 7% to 9% increase in online and non-store sales this year, highlighting the need for small businesses to strategize effectively to attract customers.

What sales trends are small business owners observing in the current year?

Small business owners have reported a mix of trends; some see an increase in overall sales but note a decrease in the average spending per customer. For instance, instead of individual customers spending large amounts, there are more customers each spending less, indicating a shift in purchasing patterns.

More about Holiday Sales Small Business

  • National Retail Federation
  • AP-NORC financial poll
  • Third quarter GDP growth
  • Faire wholesale marketplace
  • Jellycat plush toys
  • Taylor Swift merchandise
  • Holiday spending trends
  • Inflation data
  • Interest rate effects on retail
  • Supply chain impact on holidays
  • Online shopping trends
  • Consumer spending behavior

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Greg H. November 4, 2023 - 11:11 pm

saw the stats on holiday sales goin up between 3% and 4%, that’s good news right? but then you read about inflation and it kinda takes the wind outta your sails, retail’s a tough game these days

Mike O'Reilly November 4, 2023 - 11:32 pm

Saw the bit about customers spending patterns changing man thats relatable, our local hardware store is seeing the same. People are tightening belts but still wanna celebrate the holidays right? It’s a tricky balance to strike

Travis P. November 5, 2023 - 1:17 am

Inflation’s the big scary word right now, isn’t it? everyone’s talking about it from cafe’s to corner shops and you can tell folks are worried bout how far their dollar will stretch especially with the festive season coming up

Eliza D. November 5, 2023 - 5:46 am

Interesting read, those ‘comfort items’ selling well is something I’ve noticed too, People want a bit of sparkle and cheer, I reckon anything that brings a smile is gonna be worth its weight in gold this holiday season

Jenna K. November 5, 2023 - 7:41 pm

just read the section on supply chains, at our boutique we ordered extra early this year, Learnt the hard way last time when we were short on stock during the peak season… it’s like you gotta have a crystal ball to predict these things now

Samantha T. November 5, 2023 - 7:47 pm

this article hits home! Running a small business is never easy and these last few years? whew… it’s been a rollercoaster with covid the supply mess and now the inflation guess we’re all in the same boat hoping for a good end to the year


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