Small business owners have spent the last few years navigating inflation, tariffs and unpredictable consumer spending. This year, Intuit QuickBooks' annual holiday shopping survey found that consumers plan to spend $278 billion this holiday season, with $118 billion expected to go to small businesses, an 8.3% increase from last year.
The survey also found that 76% of small business owners expect to make more money this season than last year. AI has become part of how people shop and how business owners run their operations heading into the holiday season.
Shoppers plan to spend more, with a growing share going to small businesses
According to the survey, consumers plan to spend $278 billion this holiday season, a 5.7% jump from last year's estimated $263 billion and a big leap from the $211 billion they were predicted to spend in 2024. That's three years of steady growth, right when a lot of forecasters expected shoppers to pull back.
Small businesses are seeing a growing share of that spending. Survey respondents say that, on average, 43% of their holiday budget will go to small businesses this year, up from 41% in 2025 and 36% in 2024. Based on total spending, that amounts to roughly $118 billion going to small businesses, an 8.3% increase over last year.
But not every shopper is walking into the season the same way, and a closer look reveals two different stories beneath that $278 billion number.
Younger shoppers are anxious, but still showing up
Gen Z and Millennial shoppers are both more concerned about job security this season than Gen X and Boomer shoppers: 64% of Gen Z and 59% of Millennials say they're at least somewhat concerned, compared to 53% of Gen X and just 28% of Boomers.
Younger shoppers are also more worried about rising costs, with 70% of Gen Z and 65% of Millennials concerned about inflation or tariffs hitting their holiday budget, compared to 55% of Boomers. They're more likely to say holiday spending will force them to cut into essentials like groceries or bills, too (18% of Gen Z, versus 10% of Boomers). Younger shoppers, generally earlier in their careers and with less saved up, may simply have less room to absorb a shakier-feeling job market.
That anxiety isn't holding them back, though. Gen Z and Millennial shoppers are far more likely than Gen X and Boomers to say giving to family and loved ones matters more to them this year than in years past: 62% of Gen Z and 49% of Millennials, compared to 35% of Gen X and 23% of Boomers. They're committed to showing up for the people on their list. They're just doing it with less cushion, which shows up clearly in how they're planning to pay: Gen Z and Millennial shoppers use Buy Now, Pay Later services at meaningfully higher rates than older generations (21% and 24%, respectively, versus 14% of Gen X and just 6% of Boomers).
For small business owners, that's a real signal. Younger shoppers, generally earlier in their careers and with less saved up, may simply have less room to absorb a shakier-feeling job market, making flexible options worth considering.
Higher earners are cruising. Lower earners are stretching further to keep up
Income tells its own story this year, and it isn't simply a story about who's cutting back. Lower-income shoppers are most likely of any income group to say giving to family and loved ones matters more to them this year than in years past: 46%, compared with 38% of middle-income shoppers and 32% of upper-income shoppers. Despite financial pressures, the holiday season remains a priority for many lower-income shoppers.
That commitment comes at a real cost, though. Lower-income shoppers are nearly three times as likely as upper-income shoppers to say they'll cut back on essentials like groceries, utilities or healthcare to afford this year's holiday spending (19% versus 7%). They're also picking up seasonal work or a side gig specifically to cover holiday costs (15% versus 7%). And they're more concerned about rising prices affecting their budgets, with 35% saying they’re very concerned, compared with 15% of upper-income shoppers.
Upper-income shoppers, by comparison, are more likely to plan to pay off their credit cards in full each month: 67% plan to pay off their credit cards in full each month, compared with 26% of lower-income shoppers, who are more likely to use debit cards to keep tighter control of spending (63% versus 35%).
The $278 billion in projected holiday spending tells only part of the story. Lower-income shoppers are stretching further to make the season count, more often making trade-offs such as cutting back on essentials or taking extra work to cover costs.
Small business optimism is up
Small business owners are heading into this season with greater confidence than in recent years, according to the survey. Seventy-six percent expect to make more money this holiday season than last, up from 65% a year ago and 44% in 2024.
Survey respondents say last holiday season mostly delivered: 40% of small businesses say holiday revenue exceeded their expectations, and another 51% say it landed about where they expected. Seven percent say revenue fell short of expectations. Confidence that this year's customers will spend enough to support the business has also climbed, with 43% now "very confident," up from 39% last year.
Fewer small businesses describe this season as make-or-break: 47% call this season's revenue "critically" or "very" important to the business, down from 59% last year. That's a sign of confidence: With a strong year behind them, fewer feel like they're one bad season away from serious trouble.
Small businesses are also getting an earlier start than ever, according to the survey: 67% say they'd already begun preparing for the season or started in September, up from 64% last year and just 39% in 2024. Consumers are shifting earlier, too, just less dramatically: 13% say they've already done most of their holiday shopping or plan to do so by September, up from 10% last year. Small businesses appear to be moving even faster to meet shoppers where they increasingly are.
Why shoppers keep choosing small business
Consumer loyalty to small businesses hasn't wavered. Eighty-nine percent of shoppers say it's important to support small businesses over big retailers this year, holding exactly steady with previous years.
That sentiment is reflected in shoppers’ spending plans. According to the survey, 35% of shoppers plan to spend more at small businesses this year than last (8% significantly more, 27% somewhat more), while 56% expect no change and just 9% plan to spend less. That's roughly flat with last year.
The reasons why haven't changed much year-over-year. Shoppers say they choose small businesses for unique or higher-quality gifts they can't find elsewhere (47%), to support their community (46%), and for better customer service and expertise (38%). Convenience is rising too, cited by 33% of shoppers, up from 30% last year.
One channel is growing distinctly faster than the rest: shopping at small businesses through social platforms like Instagram and TikTok. Twenty-three percent of shoppers say that's where they're most likely to buy from a small business online this year, up from 20% in 2025 and just 16% in 2024, the fastest growth of any online channel by a wide margin. For small business owners without a big marketing budget, that's a meaningful signal: A strong social media presence may be as important as a business's website to convert a shopper who wants to buy small.
Tariffs, the headline number looks calmer, but the squeeze is still real
Tariffs have loomed over the last two holiday seasons, and this year isn't much different, just quieter. The headline panic has faded, but the cost pressure hasn't gone away. It's just shifted into inventory and pricing decisions happening quietly behind the scenes.
Businesses are adjusting
The loudest tariff anxiety of the last two years appears to be easing. Twenty-nine percent of small businesses now say tariffs haven't impacted them at all, up from 23% last year, and the share reporting a "significant" impact dropped to 64%, down from 69%.
Forty-eight percent of small businesses bought extra inventory ahead of tariffs taking effect, and of those, 36% say they're already restocking at noticeably higher prices. That's real cost pressure still working its way through inventory even while the topline sentiment looks calmer. Roughly a third of small businesses (30%) say they've shifted to more U.S.-based suppliers because of tariffs, and another 18% say they'd prefer to but haven't found the right domestic option yet.
Pricing is where that pressure shows up most directly. According to the survey, 38% of small businesses have already raised prices or plan to do so this season, and another 43% are considering it but are still hesitant. Just 7% say costs haven't risen enough to justify it. Raising prices isn't a small decision for most owners, and that large, hesitant middle group suggests plenty of businesses are still weighing the tradeoff between covering their own costs and risking shoppers who are already anxious about affording the season.
Shoppers feel it too, and they're skeptical of the response
Consumer concern about rising costs eased slightly, from 67% who were concerned last year to 63% this year. But one specific worry spiked: 41% of shoppers now expect higher shipping and delivery costs this season, up from 33% last year, the sharpest year-over-year jump of any cost-related concern.
Shoppers aren't fully buying the reasoning behind price increases, either. Only 9% of shoppers think businesses' price increases are fully justified. Nearly half (49%) call them not really, or not at all, justified, essentially price gouging in their eyes. And 61% say rising prices are bothering them at least somewhat this season.
AI keeps growing, and it's getting smarter about where it helps
AI isn't a novelty in holiday shopping or small business operations anymore. The survey shows steady growth in adoption for both shoppers and small businesses, alongside a much clearer picture of where the tools are actually earning their keep.
Shoppers are getting pickier about where AI helps
Forty-three percent of consumers now plan to use AI tools this season, up from 39% last year and nearly double the 23% who did in 2024. Among shoppers using AI, the draws are mostly practical: finding a better price or discount (64%), saving time on the search (47%), discovering new products or retailers (46%), and getting more personalized recommendations (39%). About a quarter (27%) say it helps them feel more confident they're picking the right gift. The time savings are notable: 96% of AI users say the tools save them at least some time this season.
Roughly a third of respondents (33%) say their use of these tools has increased compared to last year, a sign that for many, AI shopping isn't a one-time experiment but a habit that's sticking and growing.
But not everyone's on board, and it's not always about distrust. The single biggest reason shoppers give for skipping AI altogether is simply that they're not interested (55%), and 43% say they'd rather research and decide on their own. For a lot of people, part of the appeal of the holidays is doing that work themselves, the planning, the searching, the surprise, and no algorithm is going to take that over.
There's one line AI hasn't crossed for most shoppers yet: actually placing the order. Just 15% have let an AI assistant complete a purchase on their behalf, and half of all shoppers (50%) say they wouldn't be comfortable with that at all. Shoppers are willing to let AI help them decide, but they're not ready to let it make the purchase.
Small businesses are adapting and getting more strategic
Small businesses are moving in the same direction, and faster. Seventy-six percent now plan to use AI in their holiday operations, up from 74% last year. Among those planning to use it, the mood is genuinely upbeat: 80% feel optimistic about using AI this season, with 40% feeling very optimistic.
The benefits they point to are concrete: saving time for themselves or employees (56%), improving marketing effectiveness (44%), improving customer service or response times (42%) and increasing sales or revenue opportunities (41%).
Small businesses are also starting to think about AI from the other direction: not just using it, but making sure AI can find them. Forty-six percent have already taken steps to make their business easier to find through AI-powered search or shopping tools like ChatGPT or Google AI Overviews, and another 33% are planning to do so. For a small business owner without a dedicated SEO team, that's another consideration heading into the season, one that barely existed a year or two ago.
The bottom line
This year's data tells a fuller story than the $278 billion headline lets on. Spending is up, and small businesses are capturing more of it than ever. But that growth isn't landing the same way for every shopper: Younger and lower-income consumers are stretching further to make the season count, even as they show up for the people on their list just as much as anyone else.
Small business confidence is at its highest level in the survey, built in part on a strong prior season. Tariff pressure looks calmer on the surface, even as real costs are still moving through some businesses' inventory and pricing decisions. And AI keeps growing on both sides of the register, not as a novelty anymore, but as a tool people are getting more deliberate about using well.
For small business owners, that adds up to a season for cautious optimism.
Methodology
Small business survey
Intuit QuickBooks commissioned an online survey, fielded in August 2026 through Dynata, of 1,002 U.S. small business owners, managers and decision-makers at businesses with 0-99 employees. The sample included business owners (62%), self-employed or independent contractors (20%) and non-owner managers or decision-makers (18%).
Consumer survey
Intuit QuickBooks commissioned an online survey, fielded in August 2026 through Pollfish, of 6,000 U.S. consumers (age 18+) planning to participate in the 2026 holiday season.
To ensure the findings are as representative as possible, survey results have been re-weighted using post-stratification. Percentages have been rounded to the nearest whole number, so values shown in charts and graphics may not add up to 100%. Responses to multiple-choice survey questions are shown as a percentage of the number of respondents, not the total number of responses, so they will always sum to more than 100%. Responses were collected using audience pools and partner networks with double opt-ins and random device engagement sampling to ensure accurate targeting and high-quality results. Respondents received remuneration.
This story was produced by Intuit QuickBooks and reviewed and distributed by Stacker.
