This holiday season, your decision to "shop small" could help your favorite local shop keep its doors open another year.
That's according to the 523 small-business owners surveyed by American Express in October, 78% of whom said that their holiday sales this year will likely determine whether they can stay afloat in 2022. Complicating the issue further, they'll need to overcome challenges like empty shelves and staffing shortages to do so.
Saturday marks the 12th year of American Express' Small Business Saturday campaign, which helps steer shoppers toward small businesses on one of the busiest holiday shopping weekends of the year. This year's campaign comes at a crucial time for many of your favorite local stores, which are still recovering from last year's widespread Covid shutdowns and the supply chain issues they caused.
"This year, specifically, there's a lot of uncertainty," Ali Rose VanOverbeke, owner of Flint, Michigan-based eyeglasses seller Genusee, tells CNBC Make It.
Last year, roughly 33% more businesses closed than in a typical year, according to a study by the U.S. Federal Reserve. And while the economic landscape has improved in 2021, small retailers are now wrestling with a list of new obstacles, from rising inflation to ongoing labor shortages.
VanOverbeke says a combination of inflation and labor shortages among Genusee's suppliers forced her to increase some of her prices, and she's unsure whether consumers will be willing to pay extra.
Money Report
Fortunately for her — and others like her — this holiday shopping season is expected to be one for the record books. U.S. shoppers will likely spend more than $843 billion on holiday purchases in November and December, which would be a record high and more than an 8.5% bump from 2020, according to the National Retail Federation.
A large portion of this year's expected bump could go toward small businesses. Last year, U.S. shoppers spent a total of $19.8 billion with independent retailers and restaurants on Small Business Saturday, according to an American Express estimate — up slightly from $19.6 billion in 2019.
American Express' October survey polled 1,013 U.S. adults and found that 80% said they're likely to "shop small" at some point this holiday season. Another 42% said they specifically plan to shop at a small business on Small Business Saturday.
"I'm expecting to make money," says Ashley Rouse, owner of Brooklyn, New York-based vegan jam company Trade Street Jams. "We will always see a huge uptick [in sales] with holidays and gifting. So it's a big season [and] we've been prepping for it."
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