The United States is preparing for what could become another record-breaking holiday shopping season. According to the National Retail Federation (NRF), consumer spending during November and December 2026 is projected to reach $1.013 trillion, representing a 4.2% increase over last year.
At first glance, this sounds like encouraging news for the American economy. Consumers are still spending, retailers are preparing for increased demand, and businesses have an opportunity to capitalize on one of the most important shopping periods of the year.
But I believe there is a much larger conversation missing from these headlines.
A growing economy does not necessarily mean that every business operating within it is growing.
And for America’s small businesses, that distinction matters more than ever.
The Numbers Tell Only Part of the Story
While holiday spending is expected to increase, consumers are making significant adjustments to how they spend their money.
An October 2026 NRF survey found that 56% of holiday shoppers expect economic conditions to influence their spending decisions. Among those consumers, 43% intend to shop sales more frequently, while 31% plan to compare prices online more often.
A November 7 report from The Washington Post also highlighted changing shopping behavior, with consumers increasingly seeking discounts and potentially delaying purchases until December.
These findings suggest that Americans are not necessarily becoming more confident about their finances. Rather, they are becoming more strategic about how they spend.
And that presents an important challenge for independent businesses.
When consumers prioritize discounts, affordability, and convenience, smaller retailers often find themselves competing against national corporations with substantially greater purchasing power, marketing budgets, and pricing flexibility.
A large retailer can sometimes afford to sacrifice profit margins to attract customers. A neighborhood business operating on already limited margins may not have that luxury.
This raises an important question: if holiday spending reaches an all-time high, but smaller businesses struggle to remain profitable, how much progress have we actually made?
Revenue Is Not the Same as Profitability
One of the most common misunderstandings in entrepreneurship is the assumption that increased sales automatically indicate business success.
They don’t.
A business can generate more revenue than the previous year while experiencing declining profitability due to higher operating expenses.
Consider a small retailer that experiences a 10% increase in holiday sales. That might appear impressive. However, if inventory, transportation, wages, insurance, and rent have increased at a comparable or faster rate, the business could finish the season with less profit.
This is particularly important in today’s economic environment.
The Associated Press reported that economists expect higher prices to account for roughly half of the anticipated increase in holiday sales. In other words, a significant portion of the projected growth reflects consumers paying more, rather than necessarily purchasing more.
We need to stop confusing higher prices with greater economic prosperity.
As someone who works with entrepreneurs and business owners, I believe too much attention is placed on revenue generation without enough emphasis on financial management, operational efficiency, and long-term sustainability.
Sales matter, but profitability determines whether a business can continue operating, invest in its workforce, and prepare for future growth.
Small Businesses Cannot Compete on Price Alone
I have always believed that independent businesses must understand what makes them valuable beyond the products or services they sell.
Competing exclusively on price is rarely a sustainable strategy for a small business.
Large corporations typically benefit from economies of scale, established distribution networks, and sophisticated purchasing systems. Attempting to match their discounts can put smaller businesses in a financially vulnerable position.
Instead, entrepreneurs should focus on strengthening the areas where they can create a meaningful competitive advantage.
Personalized customer service, community relationships, specialized products, convenience, and authentic customer experiences are valuable characteristics that larger competitors cannot always replicate.
For example, a neighborhood retailer may not be able to offer the lowest price on every item, but it can develop relationships with customers who appreciate personalized recommendations, local accessibility, and knowing the people behind the business.
That relationship has value.
However, it must be supported by thoughtful marketing, sound financial planning, and a clear understanding of the target customer.
Small businesses should not have to become miniature versions of large corporations to succeed.
They should develop strategies that build on their strengths while addressing their operational weaknesses.
Economic Development Must Go Beyond Encouraging People to Shop Local
Every holiday season, communities encourage consumers to support independent businesses.
I support that message, but I also believe we need to examine what happens after the holiday shopping season ends.
Encouraging consumers to shop locally for a few weeks is not a substitute for developing a stronger small-business economy throughout the year.
Our approach to economic development must extend beyond promotional campaigns and temporary increases in consumer activity.
Entrepreneurs need access to capital, business education, financial planning assistance, marketing support, and opportunities to strengthen their operations.
This is especially important in urban communities such as Hartford, Connecticut, where neighborhood businesses play an essential role in generating economic activity, providing employment, and maintaining the character of commercial corridors.
When a small business closes, the impact reaches beyond the owner. It can affect employees, neighboring establishments, landlords, residents, and the broader community.
That is why I believe the success of local economic development initiatives should not be measured exclusively by the number of businesses launched or the amount of funding distributed.
We should also be evaluating how many businesses remain operational, increase profitability, create sustainable employment, and contribute to the long-term economic health of their communities.
Opening a business is an accomplishment. Building one that can survive changing economic conditions is the real measure of success.
My Perspective: We Need to Redefine What Business Growth Looks Like
The anticipated trillion-dollar holiday season demonstrates that American consumers continue to participate in the economy despite financial pressures.
That resilience is encouraging.
But I am far more interested in understanding how that spending translates into lasting opportunities for entrepreneurs.
Are businesses becoming financially stronger, or are they simply processing more transactions?
Are owners developing sustainable operations, or are they increasingly dependent on short-term sales periods to remain financially stable?
Are communities supporting the growth of independent businesses, or are we allowing more economic activity to become concentrated among a relatively small number of major corporations?
These are questions worth asking.
I believe the future of entrepreneurship should be centered on sustainable growth rather than the pursuit of revenue at any cost.
For business owners, that means understanding their financial statements, protecting their margins, building customer loyalty, and planning beyond immediate sales opportunities.
For economic development organizations, it means providing support that helps entrepreneurs become stronger business operators rather than simply encouraging them to start businesses.
And for consumers, it means recognizing that supporting local businesses is not merely a seasonal gesture. It is an investment in the economic vitality of their communities.
The 2026 holiday season may ultimately produce impressive national spending figures.
But the real economic story will not be told by a trillion-dollar headline.
It will be told by the small businesses that enter 2027 stronger, more profitable, and better prepared for the future.
Because a healthy economy should not simply be measured by how much Americans spend, but by how many businesses and communities have the opportunity to prosper.
