“While we see merchant confidence in the current economy beginning to return,” said Darren Waddell, VP of Marketing for MerchantCircle, “our data reflects that local businesses are reluctant to respond with increased spending on marketing and hiring. We are encouraged though to see that revenue expectations are up, and that more than a quarter of our merchants saw increased holiday sales over 2008. Many of these signs point toward a healthier small business environment in 2010, and we’re hopeful the macro economic climate can support that direction.”
Sentiment About Current Economy Improves, Sales Projections Up, But Merchants Remain Uncertain About What Lies Ahead
- When merchants were asked to rate today’s current economy versus the past 12 months, 27.8 percent said it was “somewhat” or “significantly” improved while 30.7 percent said it was “about the same.” 22.6 percent said the economy was “somewhat weaker” today and 18.9 percent said it was “much weaker.”
- Nearly 50 percent of local merchants surveyed expect an increase in sales revenue to “somewhat” or “significantly” improve over the next three months. This marks a nearly 10 percent increase over November 2009.
- Holiday 2009 sales finished slightly better than expected among local businesses. When asked in November 2009 how they expected holiday sales to go, only 19 percent of merchants expected any improvement over holiday 2008. In reality, the post-holiday index reveals that 25.8 percent of local merchants saw an improvement in 2009 holiday sales over 2008.
- When asked to rate the statement "The worst effects of the recession are behind us", sentiment was virtually flat from the November survey results. 44.7 percent of merchants indicated that they think the worst is yet to come (versus 47.3 Nov. 2009), and nearly 24 percent think the worst is behind us (versus 23.2 percent Nov. 2009).
Hiring and Marketing Expectations Barely Inching Up; Lines of Credit Remain Hard to Access
- Currently, 17.1 percent of small businesses expect to increase their headcount over the next three months, compared to 14.7 percent in November, 2009, a 16 percent increase. 11.5 percent expect to reduce headcount over the next three months, versus 13.4 in November, 2009, a 17 percent decrease.
- Currently 46.3 percent of merchants expect their marketing expenditures to remain flat over the next three months. 29.2 percent expect to increase marketing spend, up 2.6 percent from November 2009. 24.5 percent expect to cut marketing expenditures over the next three months, down 1.2 percent from the last survey.
- 58.8 percent of local merchants said credit availability had “worsened” or “significantly worsened” over the last three months, 36.7 percent said access to credit remained the same, and just 4.6 percent said it had “improved” or “significantly improved.”
Merchants in California and Texas Slightly More Optimistic than Other States
- 30.7 percent of California merchants and 29.3 percent of Texas merchants believe the economy is better now than it has been over the past twelve months (versus 27.8 percent nationally)
- 20.2 percent of Texas merchants expect to increase headcount over the next three months (versus 17.1 percent nationally).
- 29.1 percent of Texas merchants agree that the worst of the economy is behind us (versus 24 percent nationally). 53.9 percent of Texas merchants expect sales revenues to increase “somewhat” or “significantly” over the next three months (versus 50 percent nationally)
