Chicago small business owners less optimistic about holiday sales than experts

Despite experts’ more positive predictions, Phil Thompson said he is one of many Chicago business owners preparing for significant holiday revenue losses.

Thompson, owner of Ravenswood’s Cape Horn Illustrations, said he usually sells his illustrations at local shops and craft fairs for the holidays. However, Thompson, 38, said the pandemic has decreased traffic to stores, and the recent spike in cases has canceled most holiday craft fairs.

“People want to be out. They want to be drinking hot chocolate and have arms filled with bags,” Thompson said. “Without that, I think it will be tough.”

A Census Burau survey found that, by May, an average of 44.4% of nearly 22,500 small businesses had to close for at least a day during the pandemic. By September, Yelp reported that about 60% of temporarily closed small businesses on its site had changed their listings to permanently closed. That represents nearly 98,000 closures, the report stated.

Nonetheless, Angela Lee, a Northwestern University marketing professor, said she is optimistic for businesses that have survived thus far. While Lee said these businesses may see lower than usual holiday sales, they will likely survive.

“The smaller guys, many of them have closed already,” Lee said. “So, for those who are still around, they may have sufficient business to keep them open.”

Lee also said small businesses that sell online will likely have higher holiday sales than those that don’t. Justin Doggett, who owns Edgewater’s Kyoto Black, said he kept this fact in mind while planning for holiday sales.

Doggett, 32, said he founded Kyoto Black in 2015 as an online coffee bean service. While he bought his first storefront during the pandemic, he said he’ll push online sales for the holidays.

“I think the holidays will be pretty crazy this year,” Doggett said. “I will do pre-ordering to make sure people get their coffee on time. I always do that for Thanksgiving and Christmas.”

Doggett said he expects holiday sales to be similar to last year’s. However, Kaitlin Fletcher, owner of Lincoln Square’s Sacred Art, said she’s less optimistic.

Fletcher, 32, said artists who work with Sacred Art are worried about holiday sales. After store traffic decreased and craft fairs canceled, Fletcher said artists have made fewer in-person sales this year compared to last year.

“The holiday fairs were where they could really make some money,” Fletcher said. “For a lot of artists, that’s their main source of income.”

Jagdish Sheth, an Emory University business professor, said he disagrees with Fletcher’s outlook. Sheth said he believes art sales are likely to increase this holiday season.

Sheth, who specializes in consumer habits, said people are spending more time at home because of remote work and school. He said that means people will likely buy art and home décor for holiday gifts.

“Small businesses that offer something unique or different, like art or paintings, will most likely survive if they can deliver to the home,” Sheth said.

Lee, who studies consumer behavior, said worried business owners should remember that people who kept their jobs have more money to spend this holiday season. She said that’s because they haven’t left the house to buy non-essentials as much as they did pre-pandemic.

Lee said she believes people are more likely to buy from local businesses this year compared to last year. People will feel more socially obligated to buy from local stores instead of chain stores, she said.

“A lot of people are trying to support the local businesses,” Lee said. “People have money to spend, so if your business is still around, you can probably make it.”

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Originally written for Medill coursework on Nov. 17, 2020.