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Small businesses Across America are Bracing for a Tough Holiday Season

Erika Willitzer
2 days ago
2 min read

Small businesses across America are bracing for a tough holiday season, and rural communities like ours need to pay attention. Inflation, tariffs, and cautious consumer spending are creating headwinds—but small-town entrepreneurs are also showing resilience and creativity.

Why the Holiday Season Matters So Much

For many small businesses, the holiday season isn’t just busy—it’s make-or-break. According to Constant Contact’s Small Business Outlook Survey, up to 60% of owners say the holidays account for half their annual sales. That means what happens between Thanksgiving and Christmas can determine whether a business thrives or struggles to survive.

This year, however, 37% of U.S. business owners report feeling significant pressure heading into the season. Rising costs, inflation, and tariffs are squeezing margins, while customers are becoming more budget-conscious. Surveys suggest holiday shopping in 2025 may be more muted than last year, with families prioritizing fewer, more meaningful purchases.

The Challenges Facing Small Businesses

Inflation & Rising Costs: 32% of businesses cite inflation as their top concern.
Weak Consumer Spending: 22% worry about reduced demand as households tighten budgets.
Tariffs: More than half of U.S. businesses say tariffs will negatively impact them this season.
Consumer Confidence: Sentiment has dropped to a six-month low, especially among households earning under $75,000.

For small-town businesses, these challenges hit harder. When every dollar counts, fewer holiday purchases can ripple through the local economy—affecting not just shops, but restaurants, service providers, and even community events.

Signs of Resilience

Despite the pressure, small businesses aren’t backing down. Constant Contact found a quadrupling of new marketing campaigns launched this year compared to last. Owners are leaning into:

Social media campaigns to reach customers earlier.
Discounts and promotions to drive foot traffic.
Customer loyalty strategies, knowing that 88% of shoppers are likely to become repeat customers after a holiday purchase.

Smita Wadhawan, Constant Contact’s CMO, noted that small businesses are adapting with “efficiency, demonstrable value, and an earlier start to capture consumer engagement”.

What This Means for Small Towns

For Rural America, the stakes are high. Local shops rely on holiday sales to carry them through slower months. Supporting them isn’t just about buying gifts—it’s about sustaining the heartbeat of our community.

Shop Local First: Every purchase keeps dollars circulating in town.
Plan Early: Price-conscious consumers are shopping sooner; don’t wait until the last minute.
Choose Meaningful Gifts: Fewer items, but ones with local pride, can make a bigger impact.

The Small Town Wow Takeaway

The 2025 holiday season may be tougher than usual, but it’s also a chance for small towns to rally. By supporting local businesses, we not only help them weather inflation and tariffs—we invest in the resilience of our own communities.

Let’s make this holiday season about more than shopping. Let’s make it about sustaining the dream of small-town entrepreneurship.