Despite tough economic times, retailers are feeling more nice than naughty as the holidays approach. According to the 2011 American Express OPEN Small Business Holiday Monitor, 10 percent of retailers are planning to hire additional help for the holiday season.
Forty-three percent of small-business owners say they will continue to give gifts to their clients and customers this holiday season. In fact, many small-business owners have increased their gift-giving budget again. After spending an average of $455 on gifts for clients and customers in 2009, and an average of $740 in 2010, retailers are planning on spending an average of $827 this year.
Offering discounts has been a tried-and-true method for retailers to boost sales, and some of the 503 small-business owners in the survey said they expect this year to be no different ― but with even earlier and greater discounts than in the past. Nearly a quarter of the respondents, 24 percent, said they plan on discounting items during this holiday season. Among that group, most (62 percent) said the economy will be driving discounts deeper by an average of 11 percent, and a third said the discounts will start earlier.
The economy is not scaring small-business owners from rewarding their employees. Two-thirds stated they are looking to reward employees in some way ― end-of-year bonuses, raises, or time off. Small-business owners also plan on spending an average of $1,029 this year on holiday parties.
These signs would suggest a bit of optimism, and 34 percent of the respondents said they expect their business to grow. But many small-business owners are still wary: Over a quarter (28 percent) expected the economic situation to hurt their business prospects.
The information in the 2011 American Express OPEN Small Business Holiday Monitor was based on telephone interviews conducted among companies with fewer than 100 employees.