What is the Impact of Shopping Small During the Holidays?
There are 33.2 million small businesses in the U.S. and they make up 99% of all businesses. For the past 20 years, small businesses have accounted for roughly 40% of the United States’ gross domestic output (GDP), which equates to trillions of dollars of economic activity.
By designating a day in their honor, we are reminded that these businesses rely on our patronage during critical consumer shopping seasons as well as year-round. This year, support for small businesses is especially important as consumers are expected to spend $191 less at small businesses this holiday season, a 40% downturn from last year, as rising costs and continued inflationary pressures are causing a pull back on spending.
This could cause a strain on small businesses who rely on holiday sales to drive profit, as 61% say holiday revenue is a key factor to the success of their business, according to data from Quickbooks.
However, while total consumer spend is expected to be down, one positive outlook for small businesses this season is that consumers remain loyal to supporting and shopping small. Nearly half of consumers (47%) said a key reason they choose to shop at a small business over a larger retailer is their desire to contribute to their communities and support overall entrepreneurial success.
How Does Shopping at Small Businesses Help My Local Economy?
When you support a local business, you’re also supporting your town, city, and neighborhood by way of paying sales tax. The sales tax money is used to support public schools, parks, roads, and sidewalks, as well as fund public service workers, like firefighters.
“It may be hard to see sometimes, but your local dollar comes back to you in a variety of ways,” says Victoria Kidd, owner of Hideaway Café in Winchester, Virginia.
Small businesses are deeply engaged in their communities, so, supporting a small business supports your local community. According to the MetLife and U.S. Chamber Small Business Index, nearly all small businesses owners agree that community engagement is important for their business—and are actively engaged in giving back in several ways—including hosting or sponsoring community events, donating to local charities, and forming partnerships with other local businesses.
Are There Other Benefits of Shopping Small?
Yes! The items found in small businesses are often made by hand in small batches, resulting in one-of-a-kind pieces. Local stores may also be able to offer customized products, hands-on service, and other personal touches that big box stores cannot. In fact, 52% of consumers say they purchase from small businesses to find unique gifts or offerings that can’t be found at big retailers.
Additionally, consumers looking to avoid the stressors of holiday shopping are favoring small businesses. According to QuickBooks, 1 in 3 consumers say a desire to avoid crowded or busy big retail stores during the holiday shopping rush motivates them to shop small.
