Amidst a stressful holiday season with inflation and cost of living being top of mind, consumers continue to remain cautious this year. This year’s annual “QuickBooks Holiday Shopping Report” found that consumers are pulling back on spending this year — shoppers are expected to spend $85 billion less versus last year, a 34 percent year-over-year slump.

The recent survey of 5,500 U.S. consumers and 2,000 SMB owners was commissioned by Intuit and projects that while consumers spending will amount to $211 billion, 23 percent of consumers expect to spend less this year. Shoppers cited costs of groceries and gas are the primary factors for the spending decreasing from $485 last year to this year’s $294 at small businesses — a 40 percent decrease.

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While this may be worrying for SMB owners who rely on holiday sales to drive profit as 66 percent of SMBs reported that holiday revenue is a key part of their overall success for the year, SMBs remain positive as consumers remain loyal and support shopping small. The report’s authors estimate that 93 percent or 240 million people plan to shop small this season.

Joe Black, director of product management, accounting and commerce at Intuit QuickBooks said that this ongoing show of support by consumers presents SMB owners who rely on holiday spending to close out a successful year.

“To capture this desire to shop small, business owners should leverage digital tools to effectively manage inventory so they can ensure they have enough product to meet consumer demands, tailor their marketing so they’re reaching shoppers with deals and offers where they’re looking most and leverage AI-powered tools to streamline day-to-day operations and optimize their selling potential,” Black said.

The report also found that a main driver in this support for SMBs is emotionally driven with 47 percent of consumers specifically citing affinity for supporting their communities and SMB owners’ entrepreneurial success. Another major factor cited by 52 percent of consumers is that shoppers are looking to find unique and high-quality gifts.

“Small business owners like myself plan for a big portion of their yearly revenue to come in during the holiday season,” said Donyale Walton, founder of Hoop Mobb Accessories. “We’re not backed by big investors or a big brand name with a huge advertising budget — we’re a small team of everyday people connecting with our customers daily. Having more customers shop with us during the holiday season steers the course of our business, and determines how much we can grow in the future.”