Small businesses in the United States are stocking up early this year for the holiday season and waiting to see how many gifts inflation-worried consumers are willing to buy.
Christmas sales have been relatively strong in the last two years, with a large influx of the public to online stores with the money received from the pandemic stimulus.
Sales in November and December were averaging about 20% of the yearly total, according to the National Retail Federation, which is why the holiday season is so important for many businesses.
This year, small businesses expect more caution from consumers. AlixPartners, a global consulting firm, forecasts that holiday sales will increase between 4% and 7%, well below the 16% recorded in 2021. With inflation surpassing 8%, retailers expect fewer sales.
To prepare, owners say they are ordering earlier to avoid supply chain disruptions that affected the past two seasons and to attract early buyers.
They are also rushing any discounts they can do and are hoping more shoppers will flock to stores this year after being away by the pandemic.
“The only certainty we have is that nothing is going to be predictable. We don’t really know what to expect and our retailers feel the same way,” said Max Rhodes, CEO of Faire, an online marketplace used by small businesses for wholesale purchases.
Although the economic impact of the pandemic has greatly diminished, consumers now have inflation and high interest rates against them. Overall, spending has remained high, but some Americans have been forced to shy away from less-needy items.
Any decline can be significant, because consumer spending makes up about 70% of economic activity.
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