Christmas Cancelled on Main Street? 74% of Small Business Owners Fear They Won’t Survive the Year as Make-or-Break Holiday Season Begins

New national survey finds that among holiday-dependent small businesses, 76% say customers have less money to spend and 66% expect worse sales as tariffs, soaring healthcare costs, and persistent inflation drive affordability crisis that dampens demand

WASHINGTON, D.C., Nov. 19, 2025 –  A new Small Business for America’s Future survey reveals a crisis on Main Street as small business owners enter the holiday season facing mounting economic pressures. Washington policymakers have compounded the crisis by failing to address soaring healthcare costs and persistent inflation while actively making economic conditions worse through erratic tariff policies and a six-week government shutdown that delivered no relief.

“For too many small businesses across America, Christmas is cancelled this year, and Washington has given Main Street a lump of coal,” said Gabe Hagen, owner of Brick Road Community Corporation, a coffee roasting company in Tempe, Arizona. “We’re heading into our most critical season not with optimism but with fear. Fear that our customers can’t afford to spend, fear that policy failures are crushing our ability to compete, and fear that we won’t survive another year of this economic squeeze.”

The survey of 1,048 small business owners paints a stark picture. Twenty-one percent of respondents are currently concerned about having to close their business entirely and as they look ahead, the alarm deepens: 74% are worried about their business surviving through the next 12 months. Six in 10 describe the business climate this holiday season as unfavorable, and 59% expect sales to be worse this holiday season compared to last year.

The crisis is even more acute for businesses in sectors that depend heavily on holiday season success. Among the 334 small businesses surveyed that are in retail, food & beverages, entertainment, transportation, and advertising/marketing, 80% are concerned about surviving the next 12 months. Three-quarters (76%) say their customers have less money to spend compared to last year, and two-thirds (66%) expect worse holiday sales than last year. The very businesses that need strong holiday sales to survive the year are facing the steepest headwinds.

A Make-or-Break Season Arrives at the Worst Possible Time

Traditionally, the holiday season has been the moment when many small businesses go from red to black in their books—the crucial business quarter that determines whether they finish the year in profit or at a loss. Nearly 8 in 10 small businesses say this upcoming holiday season is important for their overall profit this year, up from 70% last year, and the majority rely on holiday shopping for at least one-quarter of their annual revenue. With 98% of retailers being small businesses, the next two months will be especially consequential for Main Street.

“We’re not entering this crucial season with confidence. We’re arriving battered by a year of policy decisions that have pressured us from every direction," Hagen said. “Now we face a holiday season where our customers are suffering from the same affordability crisis we are. Tariffs drive up our costs and their prices. Inflation means every input we buy costs more and every household budget is stretched thinner. Healthcare premiums are about to spike in January. It’s a vicious cycle, and the result is predictable: businesses like ours can’t survive when our customers can’t afford to spend.”

The survey reveals how the affordability crisis is crushing small businesses right when they need customers most:

• Customers can’t afford to spend: 68% of small business owners report their customers have less money to spend compared to last year. As prices rise due to tariffs and inflation, customers are stretched thin and focusing on essentials—not holiday shopping.

• Demand is collapsing: 58% of businesses report decreased demand for their products or services compared to last year, with nearly one-third saying demand has decreased significantly. Small businesses are losing customers who simply can’t afford what they’re selling.

• Tariffs forcing hard choices: 72% of small businesses have been impacted by tariffs, either forced to raise prices and lose customers to larger retailers (25%) or absorb costs that shrink profit margins (35%). Another 71% expect tariffs to negatively impact consumer spending this holiday season.

Small Business Growth Grinds to a Halt

The economic climate has frozen growth on Main Street. The survey reveals that expansion and hiring have virtually stopped:

• Only 5% of small businesses are actively hiring and expanding.
• 15% have put growth and hiring plans on hold.
• 16% are cutting back on staff or operations.
• 21% are concerned about having to close their business.
• Just 9% plan to hire or expand in the next six months.

Notably, 65% of survey respondents have operated their businesses for more than 10 years, so they have seen many business cycles.  And 57% are pessimistic about the economy for small businesses over the next year, with 38% very pessimistic.

"Small businesses employ nearly half the people in this country. We are the backbone of the American economy, and our success is everyone’s success. But right now, soaring healthcare costs, inflation, and tariff pressure are raising prices and threatening our very existence. When small businesses are struggling to survive, millions of jobs, families, and communities are at risk,” said Co-chair Anne Zimmerman, founder and owner of Zimmerman & Co CPAs Inc. in Cleveland and Cincinnati, Ohio. “Congress needs to focus on policies that will actually help us. That means extending the ACA tax credits so businesses and their employees aren’t hit with massive healthcare cost spikes. The Supreme Court needs to strike down these tariff policies that are crushing small businesses. And Washington needs to stop adding dysfunction and start addressing the real problems facing Main Street. When small businesses succeed, everyone benefits. But when Washington’s policies cancel Christmas for Main Street, entire communities suffer.”

The national survey of 1,048 small business owners in the Small Business for America’s Future network was conducted from Oct. 24-Nov. 5, 2025.

To request an interview with Small Business for America’s Future leadership or a small business owner in your area, contact Janel Knight Trulear at janel@emccommunications.com or 617-875-6581.

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About Small Business for America’s Future
Small Business for America’s Future is a national coalition of business owners and leaders working to provide small businesses a voice at every level of government. We’re committed to ensuring policymakers prioritize Main Street by advancing a just and equitable economic framework that works for small business owners, their employees, and their communities. For more information, visitwww.smallbusinessforamericasfuture.org. Follow us onTwitter andFacebook. #SmallBizAF.