he 2021 holiday sales season was exceptional for retailers. According to the National Retail Federation, 2021 holiday sales reached a record-breaking $886.7 billion. 

In 2022, the holiday spending outlook was much less rosy. 

For the entire year, retailers faced high inflation, supply chain constraints, consumer fears about the economy, and shoppers beginning to slow down on spending in many categories. Heading into November, there were wide-ranging reports of retailers offering heavy discounts to avoid a significant letdown in end-of-year sales.

As the dust settles from the 2022 holiday shopping season, and reports begin to emerge on how retailers fared, Novo set out to answer the question: What was the holiday shopping season like for small business retailers? 

Novo looked at two years of holiday season (November and December) deposit data from more than 8,000 of its self-employed and small business retail customers, which encompassed primarily e-commerce sellers and select brick-and-mortar stores. The majority of the retailers surveyed earned $250,000 or less in annual revenue and were all based in the U.S. 

When comparing year-over-year deposits from November and December 2022 versus 2021, Novo found:

  • Year-over-year deposit growth outpaces inflation: Small retailers saw a year-over-year increase of 11.8% in deposits, outpacing inflation during the same period. 
  • Small retailers may have fared better than large retailers: Percentage year-over-year deposit growth from small retailers was more than 4x the percentage year-over-year revenue growth that Adobe reported for e-commerce companies of all sizes (2.5%). 
  • Retailers got off to a faster start this holiday season: In November 2022, deposits for the small businesses Novo tracked were 19% higher than deposits in November 2021, indicating that small businesses were both selling more and getting paid faster in 2022.  

During a year where small businesses faced a slew of economic challenges, it’s truly impressive to see them exceed their holiday deposits from the record-breaking 2021. This growth shows the extraordinary resilience of small businesses, and the team at Novo looks forward to helping them continue to grow and succeed in 2023 and beyond.

January 19, 2023
Notes by Novo