Inflation dampens otherwise bright small biz holiday season

NEW YORK (AP) — The free-wheeling holiday shopper of 2021, happy to spend money to relieve some pent-up pandemic demand, has given way to a more practical consumer this year, many small business owners say.

The reason: inflation.

Stephanie Sala felt last year had a YOLO, or “you only live once,” feel to it. People were splurging -- spending $250 on a giant stuffed avocado, for example — at her eight Five Little Monkeys toy stores around the Bay Area in California. This year, the purchases are more low-key: Legos, Pokemon and anything mushroom-related are popular toys.

Sala says Five Little Monkeys probably won’t reach the same level of sales as last December but believes “we’ll still be well ahead of 2019.” That’s crucial for her because the last seven days leading up to Christmas account for 10% of annual sales.

In some ways, the bustling holiday shopping season feels like a return to pre-pandemic days: More people are out and about, shopping in groups and buying for themselves as well as gifts for friends and family. And there’s plenty of merchandise to select from because the supply chain snags that plagued last Christmas have largely subsided.

But small retailers say this year is still far from “normal” because decades-high inflation is forcing them to raise prices and making shoppers rein in the uninhibited spending seen in 2021 when they were flush with pandemic aid or gains from the stock market. Fifty-seven percent of U.S. adults say it has been harder to afford the things they want to give, a dramatic increase from 40% one year ago, according to a poll from The Associated Press-NORC Center for Public Affairs Research.

The season did get off to a relatively strong start. Mastercard SpendingPulse, which tracks spending across all types of payments including...