Arizona’s Main Streets Could Still Use the Help

The state’s leading small-business association today encouraged all Arizonans to reserve some of their holiday shopping time and money for Small Business Saturday, November 27, the day after Black Friday and two days before Cyber Monday.

“Shopping at small businesses helps the Arizona economy,” said Chad Heinrich, Arizona state director for the National Federation of Independent Business (NFIB), America’s largest small-business association. “One report from Michigan State University’s Center for Community and Economic Development showed that out of $100 spent at a locally owned business, $73 remained in the local economy in the form of higher wages, re-spending, and an improved tax base. Dollars spent at small, locally owned businesses are not sent to some out-of-state corporate parent. Those dollars stay local and support the community. This is a tough time for our mom-and-pop businesses. If Arizonans focus on shopping local, this could be a jolly holiday season for all.”

Some of the struggles small-business owners are facing, according to Heinrich, include:

• In its latest Jobs Report, released this month, NFIB recorded 49% of its membership reporting job openings they could not fill despite the record high in pay they were offering.
• Also this month, NFIB released the latest findings of its special COVID-19 polls showing 62% of small-business owners saying supply-chain disruptions are worse now than three months ago and 90% expecting the problem to continue for the next five months or longer.
• Equally troubling, NFIB’s Small Business Economic Trends report found the percentage of small-business owners expecting better business conditions falling four points to a net negative 37%. This indicator has declined 17 points over the past three months to its lowest level since November 2012.
• As U.S. Federal Reserve Chairman Jerome Powell said at a recent Fed Listens session. “I’ve never seen these kinds of supply-chain issues, never seen an economy that combines drastic labor shortages with lots of unemployed people.”

“Fortunately for Arizonans, they have state legislative leaders and a governor who have acted to foster small-business stability and growth,” said Heinrich. “Unlike our Congress, which seems to do all it can to stunt it.”

Heinrich pointed to the Legislature’s passage of historic income tax reform and Gov. Doug Ducey’s decision to use some federal funds to negate the need for higher unemployment insurance taxes on small-business owners as two of the biggest positives. U.S. House passage of all the tax increases contained in the Build Back Better Act was a huge negative.

Quick Facts

• Established during the recession by American Express in 2010 and officially co-sponsored by the U.S. Small Business Administration since 2011, fully 70% of consumers are now aware of Small Business Saturday, according to a 2019 Small Business Saturday Consumer Insights Survey by AMEX and NFIB.
• Shoppers at independent retailers and restaurants that day in 2019 spent an estimated $19.6 billion—but that was pre-pandemic.
• In 2020, when some thought the 2019 numbers couldn’t be matched, spending actually increased to $19.8 billion. “Many small businesses pivoted to selling online or through social media platforms to stay connected with customers throughout the pandemic, and these efforts appear to have paid off, with 56% of Small Business Saturday shoppers reporting they shopped online with a small business on the day, an increase from 43% in 2019,” reported AMEX. “In addition, small business owners rolled out a variety of giveaways and special offerings to consumers, a smart strategy as 43% of consumers reported that they took advantage of special offers or promotions from small businesses on the day.”
• Last week, the research firm Morning Consult found, “Almost 4 in 10 U.S. consumers say they will do the majority of their holiday shopping online: Another 36% plan to evenly split their holiday shopping between stores and online. Only 1 in 4 consumers will do the majority of their holiday shopping in stores.
• “About 50% of those who have started shopping have faced supply chain issues. These include items being out of stock online (48%), in store (48%) or back-ordered or delayed (46%).”