The importance of festive spend to the West Midlands economy 

Whether you feel ready for Christmas or not, December is here bringing the busiest time of the year for key business sectors including retail and hospitality. 

UK households are expected to spend £20 billion during the festive season, with small businesses targeting around 22 per cent of that spend, equivalent to roughly £4.4 billion nationally, and 26 per cent of West Midlands households planning to spend up to a quarter of their Christmas budget with small businesses. 

There is a significant economic opportunity for businesses of all sizes but with more options than ever for consumers, people in the West Midlands are looking to support independent enterprises around the Christmas holidays.  

Strong regional support for independents 

Initiatives like Small Business Saturday, whereby customers across the UK are urged go out and support all types of small businesses, both online and in bricks-and-mortar stores, are tapping into high levels of support for independent firms reported among consumers. 

Research shows 87 percent of people in the West Midlands believe it is important to support small businesses, with 60 per cent saying they already shop with them multiple times a month. 

Such levels of support make a big difference not only to independent shops and restaurants but also to the ecosystem of small service and business to business companies which rely upon local clients, including everything from accountants to farmers, plumbers and digital marketers. 

Research in Birmingham shows 72 per cent of residents want to shop local this festive season, with half citing support for their local community as the motivating factor for doing so. 

Festive markets as growth drivers 

Well established in Birmingham and nearby towns and cities, Christmas markets are popular drivers for footfall and seasonal gatherings. 

Birmingham’s Frankfurt Christmas Market, which runs throughout November and December every year, lays claim to being the largest authentic German market outside Germany and Austria, drawing thousands of visitors and creating prime opportunities for local traders. 

If you cannot make it to the UK’s second city there are others to enjoy in the West Midlands including the Coventry Christmas Market and craft markets in Solihull and Sutton Coldfield.  

Year round the UK’s street food industry is flourishing and is currently valued at £1.2bn, an opportunity which has been recognised with funding from Mayor of the West Midlands Richard Parker for up to 36 local street food businesses to receive free training, mentoring, and live trading opportunities with funding. 

The Street Food Incubator is being led by industry experts Digbeth Dining Club (DDC) and the Nationwide Caterers Association (NCASS), and the West Midlands Combined Authority (WMCA) to ensure the region has businesses to capitalise on the opportunities beyond December and New Year. 

The added footfall is not just a chance for eateries to learn and grow. The Thrive Street pop-up at Birmingham’s Bullring is giving six local businesses a chance to test retail space during peak shopping days, so they can explore how festive footfall can boost visibility and sales. 

Not everything is sparkling 

While Christmas brings opportunity for many, there are underlying challenges for small businesses in the West Midlands. 

Nationally, the majority (85 per cent) of consumers say they are concerned about the rising cost of living, with every demographic more worried than they were at the start of 2025, according to the most recent PWC sentiment survey. 

The same research found consumers were cautious about Christmas spending and told researchers they were starting their shopping later than last year and plan to spend less rather than more this Christmas, with the cost of living cited as the number one reason. 

Consumers may recognise the importance of spending money with independent enterprises but research by NFU Mutual found 75 per cent of West Midlands residents worry about the future of small businesses. 

Addressing seasonal pressures for businesses  

With the increased opportunities from the Christmas period there are greater pressures for businesses. 

While there is a rush from meeting the market’s festive deadlines, any resulting late payments for goods or services can cause big damage. Overall delayed payments are estimated by the Small Business Commissioner to cost the UK economy almost £11 billion per year.  

The Department for Business and Trade (DBT) recently ran a consultation with a view to creating a package of legislative measures aimed at addressing late payments, and ensuring businesses are paid fairly and on time. There is advice available for those looking for support with the impact for their business. 

The stress of capitalising on the Christmas season can take its toll on business owners. 

According to research, 70 per cent of entrepreneurs feel guilty taking time off from their businesses, even during annual leave.  

Statistics show that irregular incomes, blurred work and home life boundaries, a lack of employment benefits and long working hours can have a negative impact on the mental health of freelancers and the self-employed.  

By prioritising your physical and mental health, setting boundaries and fostering connections, you can create a more sustainable and fulfilling work life not just in December but all year round. 

Seeking support?

If you're a small business in the West Midlands and would like a free consultation with one of our specialist Business Advisers to review the support available for your business, please get in touch with us today. We're here to help.