Small Business Recovery Expecting To Get Boost From Holiday Spending

According to Arturo Vega Martnez, head of the Chamber of Commerce for Services and Tourism (Canacope), small businesses in Mexico City are anticipating a more successful holiday season with expected income of over US $855 million, as reported by the journal El Economista.

He noted that while the industry experienced setbacks in 2020 and 2021, it is currently exhibiting indications of recovery. In 2019, microbusinesses and small firms generated $650 million in revenue during the month of December, said reports.

According to INEGI's business demographics report (DN), the number of all business types in the country decreased by 8.17% overall between May 2019 and July 2021.

The majority of these losses were suffered by small and medium-sized firms, with a net 14.5% fewer of these establishments being in operation nationwide in 2021. Nationally, microbusinesses did better, although they still experienced a 7.94% net loss.

Small and medium-sized firms in Mexico City did even worse during the same time period, with an overall net loss of 17.21%.

Again, microbusinesses fared better, although they still recorded a 6.04% net loss. The season will begin with the pilgrimage to the Basilica of Our Lady of Guadalupe on Dec. 12, which Mexico City officials announced, gathered 11 million visitors to the Catholic shrine, many of whom came from outside the city. It was anticipated that the event would bring in US $31 million, the majority of which would go to nearby small local businesses.

Canacope predicts that in December, over 1.3 million piñata will be sold in Mexico City alone, with prices ranging from 60 to 600 pesos (US $3 to $30).

Piñata makers suffered in 2020 and 2021 with the COVID-19 pandemic shutting down the birthday parties and other social celebrations that were their bread and butter.

However, Canacope anticipates that this holiday season will see a rebound in piñata sales as COVID limitations start to loosen. Traditional piñata fillings include tangerines, oranges, peanuts, jícama, and tejocote (Mexican hawthorn), as well as lime and sugar cane which could increase sales for the agricultural businesses that produce these products.

While parties are back, inflation will put a strain on many households' budgets. In comparison to 2021, households are expected to spend up to 30% more this season, according to the National Small Business Association (ANPEC).