Xero study finds 34% of small business owners have never run holiday promotions, with 54% citing affordability as the main barrier
DENVER, Oct. 7, 2025 /PRNewswire-PRWeb/ -- New research from global small business platform Xero reveals a fundamental dilemma facing small business owners this holiday season: many recognize the power of promotional strategies, but are held back from participating by financial constraints.
A new Xero study of more than 500 small business owners across various industries in the U.S. uncovers a difficult catch-22 at the heart of the holiday season. While 72% of respondents say discounts have been the most effective tactic during past holiday shopping sales periods, nearly a third (34%) have never run any holiday promotions. The research shows that the top barrier is affordability and cash flow limitations, with 30% stating they simply can't afford to offer discounts and 54% citing financial constraints as the primary factor preventing them from participating in seasonal sales. This stands in contrast to those who do participate in holiday promotions, with 77% citing cash flow generation as their primary goal.
More than a pricing problem: The holiday scramble
Financial pressures are just one piece of the puzzle for small business owners. While discounting remains a key consideration, small businesses face a broader set of operational hurdles during the holiday season. According to the survey, the top challenges during Black Friday include managing increased customer traffic (37%), executing effective marketing and advertising (35%), and maintaining inventory control (32%).
Other significant pressures include forecasting cash flow (28%), pressure to compete (28%), managing customer experience (27%), packing and shipping logistics (20%), handling returns and exchanges (20%) and supply chain disruptions (15%). These figures highlight the complex balancing act small business owners must perform to stay competitive, meet customer expectations and maintain operational efficiency during the busiest time of year.
The strain isn't just operational; it's personal. Nearly a third of respondents pointed to stress and burnout (30%) as a concern during the holidays, revealing that holiday readiness requires more than just a pricing strategy. Success hinges on operational agility, workforce resilience, and financial foresight.
Why some businesses opt out of promotions
Interestingly, 38% of respondents say they don't need to offer discounts, and 32% believe discounting devalues their products or services. This suggests that while some businesses are financially constrained, others are strategically choosing not to compete on price, highlighting the importance of tailored financial strategies.
"This survey highlights a critical dilemma for small businesses. The holiday scramble and cash flow anxiety aren't just seasonal problems—they're symptoms of an outdated way of doing business," said Andrew Kanzer, Managing Director, North America at Xero. "The real advantage isn't winning a one-day price war; it's having the financial clarity to build a profitable, year-round business—even if that means strategically choosing to focus on value, not volume. That's a choice that must come from confidence, not constraint, and it's precisely why Xero was not only designed for small businesses, but continues to innovate to help them tap into their real-time financial data."
As the holiday season approaches, small business owners face a critical opportunity to turn challenges into growth. Whether offering promotions or focusing on operational efficiency, the key is to plan with precision and act with agility. By leveraging tools that provide real-time financial insights, streamline operations, and reduce decision fatigue, businesses can navigate peak periods with confidence. With the right systems in place, small businesses can maximize ROI and make the most of the holiday shopping season.
About Xero
Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including accounting, payroll and payments — on one platform. Xero's powerful platform helps customers automate routine tasks, get timely insights, and connect them with their data, their apps, and their accountant or bookkeeper so they can focus on what really matters. Trusted by millions of small businesses and accountants and bookkeepers globally, Xero makes life better for people in small business, their advisors, and communities around the world. For further information, please visit xero.com.
Survey Methodology
Xero's research, conducted by ResearchScape, surveyed 508 small business owners in selected industries across the U.S. from August 12 to 18, 2025. ResearchScape is a market research consultancy specializing in customer surveys; no weighting has been applied to the data.
Media Contact
Lauren Murphy, Peppercomm, 1 2035052938, [email protected]
SOURCE Xero
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