There’s been plenty of news of late to give owners a reason to invest in small business loans. Much of it has concerned reports that consumers will be spending more over the coming holiday season. However, specific dollar amounts have been hard to come by until now.
According to the National Retail Federation’s Holiday Consumer Spending Survey, the average person celebrating Christmas, Kwanzaa and/or Hanukkah will spend $804.42 this holiday season. This marks a nearly 5 percent increase over last year’s level of $767.27.
“Retailers have plenty of reasons to be optimistic this holiday season, and one of the most important pieces of evidence is the confidence holiday shoppers are exuding in their plans to spend on gifts for their loved ones,” NRF President and CEO Matthew Shay said in a media release. “While not completely throwing caution to the wind, Americans’ frugal spending habits will still be visible this holiday season as they continue to rely on discounts and sales and comparison shop. Consumers will put retailers to the test when it comes to the product mix and value companies can offer today’s shopper who is focused on much more than just price.”
As far as the breakdown of how this money will be spent, the NRF reports $459.87 will be spent on gifts for family members, an increase of 6.5 percent from the previous year. Meanwhile, an average of $80 will be spent on gifts for friends, while spending on gifts for co-workers will average out to $26.23. However, spending on others, including babysitters and pets will be even higher, averaging out to $30.43.
Competing with online retailers
While it’s great news for small businesses that consumers plan on spending more, on the downside, owners of brick-and-mortar businesses will also have to compete with e-commerce websites.
While it’s true that a recent Accenture survey found 47 percent of consumers said they plan to shop in-store come Black Friday, 56 percent of respondents told the NRF they plan to shop online this holiday season, up from 51.5 percent.
Small business owners may want to consider how a working capital loan could help them compete. For instance, extra money for marketing campaigns could go a long way toward attracting business away from the competition.
Additionally, money for expanded inventories will come in handy to keep consumers satisfied during the holiday rush.