Survey: Canadian small businesses to scale back holiday promotions
Small businesses north of the border are bracing for weaker spending from consumers this holiday season.
Almost half (46%) of small businesses in Canada are anticipating consumers to spend less this holiday season as consumers grapple with high prices, according to the 2025 Small Business Holiday Outlook Report by Canadian financial technology company Merchant Growth. About one-third (35%) of Canadian small businesses said they anticipate customers will start shopping earlier in the holiday season to take advantage of seasonal deals.
Many businesses are scaling back promotions this year. Only four-in-10 (38%) said they will be running Black Friday promotions, and only 17% said they are running Cyber Monday promotions. Just over a third (35%) said they will run Boxing Week promotions.
Among those who are holding holiday sales, many are focused on attracting new customers (51%), rewarding loyal customers (48%), and boosting cash flow (45%). Notably, 42% of those surveyed said they are not offering any discounts or promotions this holiday season.
While consumer spending expectations remain lower than previous years, more than half of Canadian small businesses (55%) said they still expect higher sales than last year, with 63% forecasting an increase between 11% and 25%. However, a quarter (25%) said they are expecting lower sales, driven by higher prices/inflation (36%) and reduced consumer spending power (25%). One-in-10 businesses said that they have cut all shipments to the United States due to increased tariffs, costs and regulatory barriers.
[READ MORE: Adobe: Holiday spending helped drive October online spending to $89B]
Labor costs are also playing a big role in Canadian small businesses’ holiday expectations. An overwhelming majority (77%) said they are not hiring seasonal staff for the holidays because they can’t afford additional wages (28%), it has been difficult to find qualified workers (24%), and they are uncertain about their sales outlook (15%).
“Business owners are feeling the squeeze as wages, rent, and supply costs continue to climb, with little sign of a rebound in consumer confidence,” said David Gens, founder and CEO of Merchant Growth. “Every purchase counts this season. When Canadians shop local, they help keep small businesses open and people working.”
Merchant Growth surveyed 60 small businesses in Canada’s retail and foodservice sectors between Oct. 23 and Nov. 7, 2025.
