As we enter the busy holiday shopping season, Canadian small business owners are somewhat more optimistic about their financial outlook even as inflation bears down on consumer spending, according to our recent Small Business Month survey*.

Of 300-plus small business owners polled, only 25 percent said they are feeling more confident about the 2022 holiday season compared to the one in 2021 — a drop from last year when 36 percent felt more confident about the holiday season of 2021 versus 2020. Just over 40 percent said they were as optimistic as last year, while 26 percent said they are less confident now than in 2021.

Pandemic economic impact takes back seat to inflation worries

After two-plus years of business disruption and revenue loss as a result of the pandemic, rising costs, labour shortages, and product availability now top the list of worries for small and medium-sized businesses.

“Inflation and supply chain concerns are affecting the confidence of small business owners leading up to the holiday season,” said Jeff Brown, Head of Commercial Solutions, Equifax Canada. “Businesses need suppliers to ensure product availability, first and foremost, along with reliable distribution and fast delivery.” 

But the biggest thing small businesses need during the critical holiday season is shoppers.  “They need consumers to show their support by buying products from them online or in-store,” noted Brown. 

Supporting small businesses

The holiday wish for small business owners last year was simply for consumers to buy goods or services (54 percent), but that number has skyrocketed to 72 percent when thinking about this year. Among other customer-based hopes expressed were:

• 28 percent would like customers to share/post about their business on social media (especially among brick-and-mortar retail businesses: 47%) 

• 16% would like customers to buy a gift card from them to support their business (31% among brick-and-mortar retailers and 27% of those in the food/beverage/hospitality industry) 

• 14%, said a simple ‘thank you’ in person or in a note to staff would make them happy

While 60 percent of Canadians plan to spend less this holiday season because of inflation, many say shopping locally is already part of their plan. According to our recent consumer survey, 61 percent of respondents say they plan to do more in-store shopping, which is up compared to last year, and many are planning to shop the Black Friday, Cyber Monday, and/or Boxing Day sales, which is good news for small business owners.

“There are a different set of challenges for small businesses this year due to inflation and supply chain issues, and many are doing what they can to stay afloat,” says Brown. “Like years past, these businesses deserve some holiday cheer.”

Methodology: Online survey of 301 Canadian small (260) and medium (41) business owners/leaders/decision makers within the Food, Construction, Retail, and Travel Industries. Completed between August 29 and September 14, 2022, using Leger’s online panel.

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