NEW YORK >> All signs point to a relatively strong holiday season for U.S. small businesses. But executives at these companies appear to have collective anxiety over the coming months.
They appreciate their customers on both counts.
Americans continued to spend over the summer, witnessing government estimates of economic growth of 4.9% in the third quarter. However, even though consumers are opening their wallets, they seem to be pessimistic about their financial situation. A recent AP-NORC poll found that many Americans are concerned about their economic future.
Meanwhile, after two years of increased sales due to the coronavirus, business owners say consumers will use up their pandemic savings and return this holiday season to save money or go out and support local businesses. I’m concerned that I might end up shopping online. Inflation remains a concern and interest rates are rising. And the weather is unpredictable.
“When you talk to retailers, there’s a lot of uncertainty,” said the CEO of Fair, an online wholesale marketplace that many small retailers use to buy inventory. Max Rose said. “Rising inflation and rising interest rates are making consumers nervous, which in turn is making retailers nervous. We’re in a strange economic situation. The data looks good, but no one is buying it. I don’t feel good about it.”
Rose said customers started looking for “Christmas” items from mid-September to mid-August last year. Buying early reduces the stress of supply chain bottlenecks and gives owners the opportunity to restock if they sell out early in the season.
For many retailers, holidays can account for more than half of their annual sales. Holiday retail sales are expected to grow 3% to 4% in 2023, according to the National Retail Federation, an industry group. However, as inflation slows, the growth in these total sales will likely become more gradual. According to NRF, sales in 2022 increased by 5.3%.
Early signs show that sales are trending at the same pace as previous holiday seasons, with consumers making purchases to temporarily put financial concerns aside.
Shop owners have seen “comfort” items sell well, including luxury candles, adult stuffed animals, especially the Jellycat brand, sparkly items (such as disco balls), and items related to Barbie and Taylor Swift. There is.
Rick Haas, owner of eight Patina Gift Shops in St. Paul, Minn., and Minneapolis, said, “There’s so much going on in the world that we’re calling it a ‘bright future’ (trend). ),” he said. “Being upbeat and happy is a trend we’re seeing across the board, and it’s this kind of happy escapism and something that makes life feel good.”
Major Twice, a card and gift shop in Brooklyn, New York, is seeing demand for more expensive candles. Owner Kimberly Yurkiewicz said the store had strong sales in 2021 and 2022, and sales have increased so far this year. He said people are paying $45 to $65 for candles, up from last year’s range of $25 to $45.
But she said it’s hard to measure numbers when things feel like they’re constantly in turmoil, whether it’s the coronavirus, the ups and downs of tourism or concerns about a recession.
“We still don’t feel like we’re operating on ‘real,’ ‘normal,’ or ‘usual’ numbers,” she said. “Accurate analysis of any kind has been very difficult over the last few years because you can end up overthinking it. …It’s hard to know what a sales report without a crisis should look like.” .”
Andy Wilkerson, co-owner of Blackhawk Hardware in Charlotte, North Carolina, said sales increased in 2021 and 2022 as holiday shoppers focused on outdoor holiday decorations in their homes instead of celebrating with guests. . But entertainment is back this year, with shoppers flooding into stores to buy sets, decorations and home decor.
So far, sales are at the same level as last year, but “especially in recent years, with so many people staying at home and changing holiday habits, sales have been unnaturally inflated,” he said. “When you think about it, this is pretty remarkable,” he said. “The fact that we’ve been strong this year is a good sign.”
Some owners still bear the scars of supply chain-driven shortages during the pandemic. Heather Haney, co-owner of Rock Paper Scissors, a stationery store in Charlottesville, Virginia, shipped her inventory earlier this year, releasing holiday items in early October instead of mid-month. She says her customers have learned that “when they see something, they buy it.”
Haney also said that while the 2021 and 2022 holidays were the best, he worries that customers will be tempted by sales from big online companies like Amazon.
“Now that we’ve moved on from the Covid-19 era, when our wonderful customers felt strongly about getting out and supporting local, we wonder if they’ll fall prey to the convenience of online shopping as life gets busier again. I’m worried,” she said. NRF expects online and other non-store sales to increase 7% to 9% this year. According to the NRF, this figure increased by 9.5% during the 2022 holiday period.
Sierra Wallis, owner of Square Feet Gift Shop in Decatur, Ga., which had its best sales in 2021 and 2022, said sales are up again so far this year, but spending per customer is… He said it is decreasing. Instead of one customer spending her $200, each of the 10 customers will spend his $20.
“We’re kind of chasing our own tails,” Wallis said. “It seems like I’ve gotten busier, but I have to work harder to get there.”
Holidays are essential to her business, as they account for two-thirds of her annual sales. Wallis said she doesn’t plan on reordering much during the holiday season because it’s unpredictable. She has already ordered all of her holiday inventory, which she hopes to have sold out by mid-December. After that, we plan to replenish the gift items that can be sold not only during the holiday period, but also from January onwards.
“We’re just keeping our fingers crossed. We’re happy about it,” she said. “But when you look at the numbers[every year]it always feels impossible. How can the next girlfriend sell so much in two months? But then it happens.”