Tariffs force businesses to adjust holiday buying strategies

While it’s normal for businesses do their holiday shopping well before the change of seasons in order to have enough stock on hand for shoppers, many were doing so much earlier than usual in order to avoid tariffs.

With the fourth quarter being most small businesses’ most profitable time period, many merchandise buyers were thinking ahead when it came to accumulating inventory.

“Because everyone freaked out about (the tariffs) before they hit, a lot of vendors contacted us and said buy what is in stock now,” said Erin Morris, owner of boutique pet store Fideaux in Healdsburg and St. Helena. “We bought everything way early because we didn’t know what would be available.”

She was ordering items in February, when the norm for some purchases isn’t until the second quarter.

While Morris is confident the stores will have what people want for their four legged family members through the end of the year, she wasn’t able to get all the Halloween costumes she wanted because of price increases.

What she won’t venture a guess about is what happens in 2026 when she needs to restock and the next shipments come with tariffs.

Fideaux dog boutique in Northern California is like many stores–OK for now, but worried about 2026. (Image: Erin Morris)

Businesses planning ahead

Fideaux is not alone in buying early.

“I probably tripled ordering-wise so I could keep my prices low,” Michelle Boldt, owner of The Toy Shop in Sonoma, said.

She hasn’t had to raise prices yet, but is worried going forward because so much of her inventory comes from China.

The store has been a staple in Sonoma for 46 years. Boldt has worked there for 20 years and been the owner for nearly 10.

For Hengameh Rafii, owner of The Holiday Shoppe in Sausalito, about 85 percent of the vendors she does business with have upped prices because of tariffs. The other 15 percent are suppliers based in the United States.

She knows she can’t pass on all the surcharges, with some as much as 45 percent, so she is being more judicious with what she buys.

“I was a little bit lucky because I placed orders in January before tariffs took effect so I feel like this year is still going to be better than next year because next year we will get tariffs from everyone,” Rafii, who has been in business for 37 years, told the Journal. “It’s too early to say if we are going to have a good or bad year, but tariffs are definitely affecting our business.”

Copperfield’s Books, which has nine locations in Sonoma, Marin and Napa counties, is struggling with tariffs as well. A big chunk of its business is gifts beyond books.

“We have had to make adjustments in how we buy to insulate ourselves and our customers as much as we can. Our lead gifts buyer, Sharon Rompleman, bought in bulk ahead of the tariffs or made the decision to discontinue buying some lines or found alternatives to some popular lines as much as we could,” R.M. Horrell, COO for the Healdsburg-based company, said. “Ultimately, we saw how dramatic the price increases were going to be and we didn’t want to pass those off to our customers.”

Blackbird a unique home goods store in Calistoga, has limited storage space but still bought as much as possible before the tariffs hit.

“When I opened Blackbird 13 years ago my goal was to have something for the vineyard worker and for the vineyard owner,” shop owner Nancy Putney-Abernathy said. “I will still try to do that with these new set of challenges.”

She worries about the next order knowing vendors are adding 20-50 percent to the original price all because of U.S. imposed tariffs.

“I have lot of concern for small manufacturers whether they can make it through this,” Putney-Abernathy said. “A couple importers have said they just can’t make that work for them. They can’t absorb all of the tariffs and provide enough margin to retailers to stay in the game.”

Spending predictions

PwC, the second-largest professional services network in the world and one of the Big Four accounting firms, in September released its 2025 Holiday Outlook survey. The company predicts seasonal spending to be $1,552 per person, a drop of 5 percent from 2024. This would be the first significant decline since 2020.

“The biggest adjustment is in gift spending, which is down 11 percent to an average of $721 — compared with $814 in 2024 — while travel and entertainment are holding steady with 1 percent increases,” the survey found.

Shoppers are also looking for deals. The PwC study found 78 percent of consumers want less expensive alternatives and 65 percent anticipate deep, post-holiday discounts. Internet searches in the last year for “discount” and “coupon code” have climbed 11 percent.

For Sharon Christovich, owner of The FolkArt Gallery San Rafael, she already is seeing a difference in spending habits that she knows will carry through the holiday season. The fourth quarter represents 35-40 percent of her annual revenue stream.

Future remains murky

While many businesses are in decent shape when comes to stock on the shelves for this holiday season, what 2026 brings is a crapshoot.

Uncertainty regarding tariffs looms at the U.S. Supreme Court is scheduled to take up the issue in November. The case centers on President Trump’s use of the International Emergency Economic Powers Act. However, the issue before the top court does not pertain to all tariff related matters invoked by the president.

Another issue small business are contending with is shipments of less than $800 from other countries had been exempt from tariffs. The president, though, has ended the de minimis rule for items from China and Hong Kong.

This is ominous for Christovich at The FolkArt Gallery.

“Even the small orders that we are placing used to be free from duty because arts and crafts were free from duty and now they are subject to it,” she said. “Indeed, the tariffs are hitting all of us who have specialty galleries.”

Her gallery showcases artisans from all over the world, so her product is primarily curated from outside the United States. Most of the countries are subject to U.S. imposed tariffs.

“I think people don’t understand that the countries where goods are coming from are not paying the tariffs. The people here are paying the tariffs. We have to pay them to bring them in. The margins are so slim we have to raise prices,” Christovich said.

Note: A version of this story first appeared in the North Bay Business Journal.