Majority of U.S. Small & Middle Market Retailers Expect Strong Sales this Holiday Season, According to the American Express H...
November 10 2016 - 8:15AM
Business Wire
Small and Middle Market Businesses across
Industries are Planning to Thank Customers with Gifts and Employees
with Bonuses and Holiday Parties
As businesses gear up for the holiday season, they are
optimistic about sales and predict growth for the next quarter and
into 2017, according to the American Express (NYSE:AXP) 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.
Retailers See Growth Potential in 2017 as Contingent on
Successful 2016 Holiday Season
Small Business Saturday often marks the start of the busy
holiday shopping season for small retailers, and holiday sales are
a significant indicator of future growth for many of these
businesses. Nearly six in ten (59%) small business retailers see
their potential for growth in 2017 as being contingent on a
successful holiday season. Middle market retailers feel even
stronger about the importance of the holidays, with 89% saying
their potential for growth in 2017 will be contingent on a
successful 2016 holiday season. To ensure they can meet demand, the
majority of middle market retailers (77%) plan to hire additional
staff for the holidays, while less than one third (31%) of small
business retailers plan to add staff.
“Retailers are optimistic about the upcoming holiday season and
the impact it will have on their growth in 2017,” said Susan
Sobbott, President of Global Commercial Payments at American
Express. “As small and middle market retailers gear up for this
critical season, many are offering promotions to draw customers in,
and hire additional staff to ensure quality customer service during
the busy season.”
Retailers Feel the Pressure to Discount; Use Social Media to
Stand Out
Given the importance of the holiday season, small and middle
market retailers are putting a great deal of effort into making
sure they see strong results. As retailers of any size look for
ways to succeed, many feel they will need to offer sales and
promotions. Sixty-four percent of small business retailers, and 88%
of middle market retailers, think they will need to be more
aggressive in sales and promotions in order to stand out. As a way
to raise their company’s profile, 89% of small business retailers
will utilize social media this holiday season; of those, the
greatest number are using Facebook (81%).
More than two-thirds of small business retailers (67%) say their
company will be offering holiday discounts this year. Among those
offering holiday discounts:
- 58% will start offering holiday
discounts the same time as last year
- 42% will start offering holiday
discounts earlier
Small Businesses Plan to Spend More on Gifts and Parties,
Middle Market Companies to Give Larger Bonuses
As small businesses across a variety of industries 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 for 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 get
together. For those hosting a holiday party, the average amount
they expect to spend is $3,000; which is a $900 increase over last
year.
Additionally, more than three-quarters of small business owners
(80%), and 87% of middle market companies across industries are
planning to give their employees bonuses this year. When it comes
to the type of bonus they will receive, 54% of small business
owners indicate that their employees can expect something
equivalent to “a small stocking stuffer” (less than 5% of annual
salary), 22% expect to give a gift “too large to fit in the
stocking” (5 to 15% of salary) and only 4% will give staff the
“gift of their dreams” (more than 15% of their salary). However,
20% say their employees should expect “a lump of coal” (no bonus at
all). Middle market employees can expect slightly larger bonuses –
14% will be getting the holiday gift of their dreams (more than 15%
of salary), 37% will be getting a gift too large to fit in the
stocking (5-15% of salary), and 37% will get a small stocking
stuffer (less than 5% of salary).
Despite Expectations for Growth, Holiday Season Is Not
Carefree
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 who say their
company will be ‘making gains’ (50%) and nearly one in ten who say
their company will be ‘expanding by leaps and bounds’ (9%).
Despite their positive outlook and focus on growth, there are
causes for concern during the 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.
Survey Methodology
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 October 4-16, 2016. The survey has a margin of error of
+/- 3.1% at the 95% level of confidence for the small business
sample of 1000 and a margin of error of +/- 4.4% at the 95% level
of confidence for the sample of 502 middle market companies.
Sub-samples of small business and middle market retailers have
higher error rates.
About American Express Global Commercial Payments
Through its Global Commercial Payments division, American
Express offers a suite of payment and lending products that
help businesses and organizations of all sizes gain financial
savings, control and efficiency. Global Commercial Payments
provides solutions for travel and everyday business spending, cross
border payments, global currency solutions, and business
financing.
To learn more about Global Commercial Payments visit
business.americanexpress.com
To learn more about American Express OPEN, which provides
products and services for small businesses and entrepreneurs in the
United States, visit www.OPEN.com
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version on businesswire.com: http://www.businesswire.com/news/home/20161110005231/en/
M BoothRyan Walker, 212-388-7677ryanw@mbooth.comorAmerican
ExpressFelicia Mowll, 212-640-1709Felicia.A.Mowll@aexp.com
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