THUNDER BAY – Business Analysis – As we close out another tumultuous year for small businesses, the emerging trends of reduced discretionary spending and the dominance of online shopping are creating a perfect storm for independent retailers across Canada and the United States. While these shifts may seem like minor adjustments to consumers tightening their belts, they signal a crisis for small retail businesses already hanging by a thread.
Preliminary reports from this holiday season paint a grim picture.
According to the National Retail Federation (NRF), overall holiday sales grew by a modest 3%, falling short of the projected 4-6% growth. However, online giants like Amazon and Walmart have almost exclusively driven this growth.
Small businesses, on the other hand, have reported declining foot traffic and revenue. In Canada, a survey by the Canadian Federation of Independent Business (CFIB) found that nearly 60% of small retailers experienced lower-than-expected holiday sales, with many citing reduced consumer spending and competition from e-commerce platforms as the primary culprits.
The pandemic’s e-commerce boom forever changed consumer habits.
Today, convenience and price competition outweigh the value of supporting local businesses for many shoppers. This shift has real consequences. Every dollar spent on Amazon is a dollar that does not contribute to local economies, fund community programs, or create jobs within our neighbourhoods. Small businesses are not just stores; they are the lifeblood of our communities.
Yet, they are being squeezed out of existence by multinational conglomerates that thrive on scale and efficiency at the expense of personal service and community engagement.
Cutbacks in discretionary spending are exacerbating this trend. With inflation continuing to strain household budgets, consumers are prioritizing essentials over experiences or local goods. This is especially damaging during the holiday season when small businesses rely on festive sales to sustain their operations through slower months. Unlike big-box stores, small retailers do not have the capital to absorb these losses or the supply-chain dominance to slash prices and remain competitive.
If this trend continues unchecked, the economic and social fallout will be severe. The closure of small businesses not only diminishes consumer choice but also contributes to urban decay, higher unemployment, and a loss of community identity. We cannot let convenience and price overshadow the broader implications of our purchasing decisions. Governments and communities must act now. Local campaigns to encourage shopping small, tax incentives for independent retailers, and fairer e-commerce regulations to level the playing field are urgently needed.
Meanwhile, consumers hold immense power. Each purchase is a vote for the kind of world we want to live in. Do we want a world dominated by faceless corporations that extract wealth from our communities or one where small businesses continue to bring charm, innovation, and vitality to our neighbourhoods? The choice is ours, but the clock is ticking.
Lori Paras
The Hub Bazaar
