Small Business Saturday has gathered momentum since American Express began the promotion in 2010 to provide smaller companies more exposure during one of the most important shopping weekends of the year.
And this year, the smallest retailers could definitely use the boost, according to data from Sageworks Inc., a financial information company that tracks privately held businesses.
A financial statement analysis of privately owned retailers shows that the largest store operators have seen stronger growth so far this year compared to the smallest shops. Indeed, retailers with annual sales of below $1 million have posted a nearly 3 percent drop in sales year to date, compared with a nearly 6 percent increase for retailers of all sizes in Sageworks' database and a roughly 11 percent increase in sales for retailers with annual sales of more than $10 million.
Through its cooperative data model, Sageworks collects financial statements for private companies from accounting firms, banks and credit unions, and aggregates the data at an approximate rate of 1,000 statements a day. While not all private retailers are small operations, certainly most small retailers are privately held.
"American Express has done a nice job successfully branding this and grabbing Saturday as Small Business Saturday," said Sageworks analyst Tim McPeak. "It already has some name recognition, and I think it's an idea that resonates with a lot of consumers."
He said the idea of shopping at small stores may particularly appeal to consumers this year, given how much politicians talked about small businesses' role as the engine of the U.S. economy during the election season. "There might be some carryover from that," McPeak said.
Smaller retailers may also benefit if the promotion, set for Nov. 24, provides them visibility that's not inherently connected with the steep discounting tied to Black Friday promotions, he noted.
American Express has said 103 million Americans shopped at independently owned small businesses during last year's promotion. The financial services company said it saw a 23 percent increase in transactions at small business merchants among its cardholders during last year's promotion, which includes American Express giveaways and efforts to call out the importance of small businesses.
American Express doesn't define small businesses for this promotion in terms of revenue. Instead, the company says businesses eligible to participate in its promotion include locally owned storefront and online businesses, excluding franchise brands that have more than 20 corporate-owned units and excluding certain industries, such as stores selling liquor and firearms.
Citing U.S. Small Business Administration data, American Express noted that small businesses pay 44 percent of total U.S. private payroll and created 65 percent of net new jobs in the 17-year period ending 2009. A survey in partnership with the National Federation of Independent Business found that 46 percent of small businesses are aware of the promotion and plan to participate this year.