Houston small businesses see drop in sales amid peak holiday shopping season

HOUSTON, Texas (KTRK) -- James Beck stocked the shelves of his gourmet hot sauce shop, iBurn, in southwest Houston prior to the holiday season. He has about 300 different sauces on his shelves that he hoped would fill the needs of shoppers looking to gift their loved ones.

"We've still got a whole bunch of inventory," Beck said.

His store struggled during the height of the COVID-19 pandemic. Beck said at times, their sales were down 70%. Still, that does not compare to the struggle he has faced this holiday season.

"It's the worst year we've had, period," Beck said.

Sales for the decade-old shop are down 80% in comparison to their peak holiday season. Beck believes shoppers are turning to services like Amazon Prime and Walmart Plus for their holiday shopping needs more than ever.

"If they can go and get the exact same product on the big sites for free, as far as the shipping is concerned, and they're very close or even below what we're charging, then there's no competition," Beck said.

Beck has gauged the pulse of small businesses' holiday season not just on his own sales, but on his neighbor's business, Mailbox and Copy.

Sanjiv Desai works at his family's shipping store. He said sales are down 50% in comparison to previous years.

"You can see right now when you turn around, the whole parking space is empty," Desai said five days before Christmas.

He believes about 70% of the packages he receives are pre-tagged returns that need to be sent back to companies.

Desai said that this year he did not see his usual customers with large businesses mail hundreds of gifts to clients like they usually do. He said there has been a major shift this year.

He pointed to the few holiday-colored bubble envelopes on his shelf that had collected dust during the three months they sat on the shelf waiting to be sold.

Desai believes people are shipping gifts this holiday season directly from online retailers to the recipients and cutting him out of the equation.

Despite the struggles these small businesses are facing, Tim Jeffcoat, the director of the U.S. Small Business Administration's Houston division, said the city is having a great holiday season.

"Overall, we have significant job growth in Houston," Jeffcoat said. "Greater job growth usually means greater activity at retail stores, restaurants, entertainment venues, and things of that nature."

Beck believes that is true for larger businesses, but not small ones like his and Desai's.

"The economy has gone sideways," Beck explained. "Regardless of how much they want to say that we are going to have record sales this year. They are record sales for the big brands. It's not record sales for small businesses."

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