The trust economy: Why consumers are choosing small businesses (even in a cost-of-living-crisis)

This Christmas, millions of UK shoppers are set to make a choice that defies conventional economic logic: prioritising small businesses over big-box retailers, even as prices rise.

Small Business Saturday, now in its 13th year in the UK, has become a key moment for independent retailers. In 2024, shoppers spent an estimated £634 million on the day itself, demonstrating the continued appetite for local, independent shopping.

But the real story isn’t simply the spending figures – it’s the paradox. At a time when household budgets are stretched thin, shoppers are actively choosing to pay more at local businesses, driven by values that transcend price: namely authenticity, and the knowledge that each purchase directly supports an actual person.

The reality is that trust has become a form of currency. Consumers aren’t merely looking for products – they’re buying connection, transparency, and ethical certainty.

In an increasingly complex retail landscape, small businesses offer something that’s become harder to find: clarity. When you buy from an independent shop, you can see directly who benefits. You can ask questions about sourcing or production and get straightforward, immediate answers. 

Seasonality can amplify this dynamic. During the festive period, gifting isn’t just transactional – it’s symbolic. Consumers are more likely to seek out unique, meaningful items, from locally crafted jewellery to artisan foods. 

A Capital on Tap study found that 52% of shoppers actively seek personalised products, while over half want to support their community. This creates a window where the “trust premium” becomes even more pronounced. Shoppers aren’t just willing to pay more – they want to pay more. For many, a £20 hand-poured candle from a local maker carries an emotional weight that a £12 supermarket equivalent can’t match.

Putting a price on craft

For small businesses, understanding this consumer mindset is crucial. Your customers aren’t necessarily looking for the cheapest option – they’re looking for value they can justify. This means your pricing strategy shouldn’t compete on cost alone, but on demonstrating what makes that cost worthwhile. 

Customers are often choosing to pay for things that don’t always exist in big-box models: ethical sourcing that’s been personally vetted, local production that keeps money circulating in the community, bespoke craftsmanship that can't be replicated at scale.

When customers understand exactly why something costs what it does, they’re far more likely to feel the purchase is justified, even if it stretches their budget. This isn’t about vindicating inflated prices; it’s about clearly communicating the real value you’re delivering.

Playing the long game

More than 84% of consumers recognise the importance of supporting local enterprises, and 95% believe SMEs add real value to their local economy. And academic research backs this up: when small businesses thrive, local economies become stronger, more diverse, and more resilient.

The consequences of losing local businesses can hit fast. Reduced competition drives prices up, local jobs vanish, and communities become dependent on a handful of large retailers who hold all the leverage.

This is where small business owners play a crucial role. Every purchase needs to feel like more than a transaction. Every item sold causes a ripple: a single £10 purchase plays a role in supporting local jobs, keeping the high street alive, and strengthening the community. 

One transaction might seem insignificant, but when customers make it a habit — and potentially encourage others to do the same — the effect multiplies. 

Making it work: practical strategies

The practical question for small businesses is this: how do you help customers justify choosing you when they’re counting every pound?

• Be clear about your value: You don’t need to compete on every product line. Focus your messaging on items where the trust premium resonates most: gifts, special occasions, or products where quality and ethics genuinely matter to customers.

• Invite questions: Don’t assume customers understand your pricing. Be proactive in explaining why something costs what it does. When customers understand the story behind the price - the sourcing, the craftsmanship, the local impact - they’ll be far less likely to baulk at it.

• Frame it as an investment, not just a purchase: Help customers see the long-term value. A £30 jumper that lasts five years is genuinely cheaper than three £15 ones that fall apart. This is where you can compete with larger retailers: on durability, quality, and longevity, rather than sticker price alone.

• Leverage the festive period: Christmas is when your unique offerings have the most appeal, especially if you offer products customers genuinely can't find elsewhere. This is when the trust premium can deliver the most satisfaction, so make sure your seasonal stock reflects what makes you different.

The bigger picture

Throughout 2025, we’ve recognised that consumer loyalty is not built solely on price. Shoppers are making decisions based on value, emotional connection, and ethical impact. Even in a cost-of-living crisis, the businesses thriving aren’t necessarily the cheapest – they’re the ones that make customers feel good about where their money goes.

The “premium” customers pay isn’t just for a product – it’s for peace of mind, local connection, and a relationship that makes shopping feel less transactional, and more personal.

The payoff isn’t just seasonal sales – it’s customers who’ll return throughout the year, recommend you to others, and remain loyal, even when budgets are tight.