Less than half (47%) of small businesses plan to give gifts to customers this holiday season on par with last year (52%), and will spend a similar amount ($455 in 2009 vs. $457 in 2008), according to the American Express OPEN Small Business Holiday Monitor, an annual survey of business owners conducted since 2002. (Download the American Express OPEN Small Business Holiday Monitor)
But in this economic environment, fewer small business owners (35%) are giving employee gifts (vs. 46% in 2008), 31% have plans to give year-end bonuses (vs. 44% in 2008) and 16% will give raises (vs. 30% in 2008). Almost half of business owners (47%) will give employees time off over the holidays, even with last year (47%), although they are less inclined than last year to participate in a volunteer activity with their employees (19% in 2009 vs. 28% in 2008).
Overall, half of business owners (50%) possess an optimistic outlook on near-term business prospects over the next six months and more than two thirds (69%) do not believe the worst of the U.S. economic woes are over. As a result, nearly six in ten entrepreneurs (57%) say the economic downturn has changed their holiday gift giving behavior. To that end, 42% of small business owners are giving less expensive customer or employee gifts, 28% are avoiding laying out cash for gifts by using reward points, bartering, or using their own company’s products/services, and 23% have stopped giving gifts to clients.
Among those planning to give gifts, one in four (26%) business owners said they’ll continue to give holiday gifts to customers because they have done it for so long…