Newly released survey data shows that small businesses are pessimistic about their retail sales going into the holiday season.
The Main Street Merchant Report released Tuesday by Alignable, a network of thousands of small businesses, are not optimistic about their sales for small businesses this weekend.
The Saturday holiday, which follows Black Friday, has been an opportunity for local retailers to drum up business, however, the survey found enthusiasm about the holiday and its impact on sales is down.
More than half of small businesses that are participating in Small Business Saturday expect to make less this year than last year’s Small Business Saturday. Meanwhile, only 20% of surveyed small businesses owners said they even plan to participate.
“While another 28% are still undecided, a whopping 52% have said the annual shopping tradition has lost some of its original luster, because it rarely results in a revenue boost,” Alignable’s Chuck Casto said in a statement. “Many who are opting out of Small Business Saturday say that the proliferation of deals being offered by national chains — declaring Black Friday discounts a month before Black Friday actually arrives — are diminishing the importance of special shopping days.”
That change is a stark contrast to last year.
“The current dip in projected participation rates — from 75% in 2022 to a mere 20% in 2023 — is monumental by anyone’s standards — down 55 percentage points,” Casto said.
This trend comes as more businesses report a decline in consumer spending, according to Alignable.
“In fact, the percentage of shop owners noting consumer spending declines skyrocketed from October to November — up 10 percentage points — as 49% of retailers reported reduced spending vs. just 39% last month,” Casto said. “That’s the steepest jump in at least six months.”
A recent economic analysis from The Conference Board found that consumer spending will likely drop in the coming months, giving more backing to small business owners’ pessimism.
The report also projects high inflation and high interest rates.
“After a pause in September, the LEI resumed signaling recession in the near term,” Justyna Zabinska-LaMonica from The Conference Board, said in a statement, adding that it will be a “very short” recession. “We forecast that real GDP will expand by just 0.8 percent in 2024.”
