Small businesses with low online presence left behind in holiday buying boom

SAN FRANCISCO - Retail experts are expecting consumers to spend even more this year than last year, and a look outside shows plenty of people out looking for that perfect gift even with shelter-in-place orders in effect.

However, while people may be spending more, they're not spreading that money around. Big businesses will benefit from the buying boom, but many smaller businesses will be left behind, according to experts.

Shoppers are making the most of the last days before Christmas, with plenty of cars at the Livermore outlet malls, and in San Francisco. A steady stream of shoppers showed up at Union Square, one of the city's premier shopping spots.

But, even with customers shopping, the impact on business is clear, especially for restaurants.

"You think about the holiday shopping experience, you go out, you buy a nice gift, you meet up with your friends, you have a nice meal, you shop again," said Jay Cheng from San Francisco's Chamber of Commerce. "That's a full four hour stretch. Without that outdoor dining experience, you cut that four hour stretch into a one hour stretch."

Even with the pandemic, the National Retail Federation is projecting $755 to $766 billion in holiday spending this year, that's a three and a half to five percent increase over last year.

Bigger stores with a large online presence are fueling that buying frenzy. But, the city's Department of Economic and Workforce Development says many smaller businesses that don't have a significant online presence may be left behind.

San Francisco's Chamber of Commerce says more customers are shopping online, and picking up in person, a much more directed shopping experience. In shopping districts like the Marina's Chestnut Street, smaller locally owned businesses used to benefit from larger retailers like Apple drawing customers who will then window shop or eat.

"But, we don't have that anymore because people order the iPhone 12 online, they go to the store to pick it up, and then they go home," said Cheng. "They don't wander the street, they don't go to De la Rosa and get a bite to eat, and that's where we're getting hurt."

San Francisco is encouraging consumers to shop small, look for those local companies and support them with their holiday spending. The Chamber of Commerce saying that can make the difference between a boom and a bankruptcy.

"A lot of small retailers are open through the holiday shopping season because they're desperately looking for those sales to keep them afloat through the end of the year," said Cheng.

Already e-commerce sales are up by more than a third over last year.

San Francisco's Chamber says many small businesses without that online presence are telling them they need direct support from their city or county to weather this pandemic.