October 2024 Small Business Outlook: Optimism Prior to Holiday Shopping Season

Holiday shopping predictions are out with less than six weeks before Small Business Saturday. Consumers are expecting to spend less this year, but small business owners remain optimistic with 82% believing they will earn the same or more as last year. Inflation and high prices still dominate Americans’ perspective and 90% of consumers say they will be hunting for bargains this year. The good news is that small business owners’ top tactics to attract shoppers are deals and discounts for the 2024 holiday gift season.

Summary: Good news is that 93% of consumers plan on shopping small this holiday season. Bad news is that the survey of 5,500 consumers and 2,000 small business owners predicts a 34% drop in holiday spending compared to last year.

• 23% of consumers believe they will have their holiday shopping done by Halloween and 73% believe they’ll be done before December.
• Black Friday is the most popular holiday shopping day for consumers (66%) and for small business owners (36%) followed by Small Business Saturday (consumers 34% & small business owners 33%).
• Consumers are expecting to spend $294 each at small businesses this holiday season.
• 82% of small businesses expect to earn the same or more revenue as last year despite 23% of consumers saying they will spend less this year.
• 90% of consumers say they will be hunting for deals this holiday season, which matches the top tactic small businesses are using to attract customers (34% are offering deals and discounts).

Learn more about this data from the QuickBooks Holiday Shopping Report, published Oct. 15, 2024. 

Optimism for a post-election uptick in sales continues to remain high. However, small businesses are experiencing a “pause” in new business due to election uncertainty. Inflation still tops the list of concerns, but fear of continued price hikes has calmed down on Main Street.

Summary: Small businesses hit the “pause” button on growth until after the election.

• 17% of small business owners reported higher sales in the past 3-months (1 point lower than August) and the percentage expecting higher sales rose 9 points to reach -9%.
• 23% of small business owners ranked inflation as their top concern (1 point lower than August and still the top cited problem) and 17% said that labor quality is their top concern (4 points lower than August).
• 22% of small businesses raised their prices in August (2 points higher than August) and 25% are planning on raising prices in the next 3-months (no change from August).
• 51% of small business owners reported capital outlays in the last 6-months (down 5 points from August) and 19% are planning capital purchases in the next 3-months (down 5 points from August).
• 8% of small business owners expect better credit conditions in the next 3-months (unchanged from August).
• 4% of small business owners believe now is a good time to expand (no change from August).
• 62% of small business owners are not interested in a loan (2 points higher than August) and 26% report borrowing on a regular basis (down 1 point from August).
• 4% of small business owners reported that financing was their top problem in August (no change from August).

Learn more about this data from the National Federation of Independent Business (NFIB) Small Business Optimism Index, published Oct. 8, 2024. 

There is increased optimism in the October Small Business Outlook found that small business profits will rise alongside increased revenues in the months ahead. Fears of inflation rising seem to have calmed, although small businesses remain concerned with high prices and the dampening effect that has on plans to grow.

Summary: Flat spending is better than declining spending on Main Street.

• Month-over-month sales at small businesses in September were flat at 0.1% compared to August and year-over-year sales at small businesses grew 1.8% compared to September 2023.
• Spending increases in September came from general merchandise, food and beverage retailers, food manufacturing, and professional scientific and technical services.  Specialty trade contractors, educational services, and healthcare services also performed well in September.
• Spending decreases in September were generally a result of slower foot traffic and came from restaurants and bars, gas stations and motor vehicle dealers.

Learn more about this data from the Fiserv Small Business Index, published Oct. 3, 2024.