Survey: Small business holiday spending to increase 44%
Consumers are expected to shop at more small businesses this holiday season in the face of ongoing tariff turmoil and inflation.
A new report from Intuit Inc. reveals that U.S. consumers plan to spend $263 billion on the holidays this year, a 25% increase from 2024. Forty-one percent of total consumer spending is estimated to go towards small businesses, representing a $109 billion opportunity for small businesses and a 44% increase year over year.
The overwhelming majority (93%) of business owners surveyed shared that the holiday season is vital to their success this year. Overall, respondents expect sales from the season to contribute nearly half (47%) of their total yearly revenue, up from 33% in 2024.
[READ MORE: Study: Most shoppers willing to substitute, downgrade holiday gifts to save money]
Intuit’s survey found that small businesses are going into the season with optimism. Nearly two-thirds (65%) anticipate more revenue in holiday sales compared to last year, and more than half (57%) say their yearly revenue leading up to the holiday season has increased year-over-year. Nine-in-10 (89%) businesses surveyed shared they are confident that their customers will spend enough to help them meet their yearly revenue goals.
For consumers, 86% of those surveyed shared they’re concerned about tariffs and inflation impacting their holiday spending, and more than half (51%) expect to encounter higher prices. A third (33%) of those surveyed also expect increased shipping and delivery costs, and a quarter (25%) anticipate fewer promotions and discounts when shopping for gifts this year. Shoppers say they are focused on hunting for deals (72%), shopping early (37%), and finding practical, lower cost gifts (36%).
Similarly, nearly seven-in-10 (68%) small businesses say tariffs have had a significant impact on their operations, leading some to increase prices (32%), absorb higher costs internally (30%), and stock up on inventory earlier than usual (25%). To counteract increased pressure, 44% will offer exclusive deals, 40% will increase advertising and social media outreach, and 37% will emphasize customer service to win and keep holiday shoppers.
“With economic factors like tariffs and inflation impacting how consumers are managing their spending, small businesses need to be savvy when considering how they can best attract customers and maximize their sales this holiday season,” said Simon Worsfold, head of data communications at Intuit QuickBooks. “With almost half of U.S. consumers prioritizing shopping small this season, small business owners can capitalize on this over the next few months by leveraging digital and AI-powered tools to tailor their marketing to target this consumer interest, prepare their inventory to meet peak shopping moments, and streamline the manual backend work so they can focus on managing the front end of their business.”
Additional insights from Intuit’s holiday spending survey include the following:
•Online shopping continues to dominate the holidays, especially on mobile, as two-thirds (65%) of consumers say they’ll use their phones to browse, compare prices, and buy gifts. The biggest draws are easy mobile checkout (51%), mobile-friendly websites (47%), and retailer apps with exclusive deals (43%). Still, more than half of shoppers (52%) plan to shop both online and in store.
•Nearly three-quarters (74%) of small businesses are planning to implement AI during the holiday season, compared to just 30% last year. Forty-two percent of these businesses report that they will be utilizing AI during the holiday season for the first time.
•Forty-five percent of consumers expect to do most of their gift buying in November, with 71% of U.S. consumers planning to make a purchase on Thanksgiving day. Nearly one-in-three (30%) consumers plan to start their holiday shopping in October.
Intuit’s findings are based on a recent survey of 6,000 U.S. consumers and 1,000 small business owners. The full data can be found here.
