As small and mid-market businesses gear up for the holiday season, they are optimistic about sales and predict growth for the next quarter and into 2017. This is according to the American Express Holiday Growth Pulse, a survey of 1,502 small and middle-market businesses across a variety of industries. Specifically in the retail industry, nearly six in ten (59%) small-business retailers think holiday sales will be stronger compared to last year, and 34% think they will be roughly the same as last year. Small-business retailers (companies with fewer than 100 employees and annual revenues of $250,000 or greater) are not alone in their positive outlook – 81% of middle-market retailers (companies with $10 million to $1 billion in annual revenues) also feel sales will be stronger than last year.
As small businesses anticipate a successful holiday season, they plan to spend more than last year to thank current customers with gifts and reward employees with more generous holiday parties. More than seven in ten (71%) small businesses will spend money on holiday gifts for clients or customers this year. On average they will spend a total of $6,700–an increase of $1,330 over 2015. Almost nine in ten (87%) middle-market companies also plan to give holiday gifts to clients and customers. In terms of small business’ plans for staff this holiday season, more than two-thirds (69%) plan to host a holiday party or a get-together. For those hosting a holiday party, the average amount they expect to spend is $3,000, which is a $900 increase over that of last year.
In the near term, growth overall is the top priority for small and middle-market companies across industries. Roughly three quarters (74%) of small businesses and more than nine in ten (91%) middle-market companies identify growth as their top priority. As they consider expansion, 59% of small businesses expect their business to grow over the next quarter–with half saying their company will be ‘making gains’ (50%), and nearly one in ten saying their company will be ‘expanding by leaps and bounds’ (9%).
Causes for concern
Despite their positive outlook and focus on growth, there are causes for concern during this holiday season:
- Employee productivity (41%) and data security (38%) will be greater concerns during the holidays than during any other time of the year for small businesses from various industries.
- For middle-market companies across industries, employee productivity is the greatest cause for concern around the holidays (24%) and 78% agree that employee productivity will be a greater concern at their company during the holidays than during any other time of the year. Additionally, 76% agree that data security will be a greater concern during the holidays than during any other time of the year.
The American Express Holiday Growth Pulse is based on a nationally representative sample of 1,000 U.S. small business owners/managers, defined for the purposes of this survey as companies with fewer than 100 employees and annual revenues of $250,000 or greater, and 502 middle market companies, defined for the purposes of this survey as companies ranging in size from $10 million to $1 billion in annual revenues. The anonymous survey was conducted online among financial decision makers, owners and managers from October 4-16, 2016.