Loyal Customers Drive Revenue Growth for Canadian Small Businesses: Insights from Square's Local Economy Report

In a compelling new release, Square Inc., a leading technology company, has unveiled the Square Local Economy Report, highlighting the crucial role of repeat customers—termed “regulars”—in generating revenue for small businesses across Canada. The findings underscore that a small but dedicated group of loyal customers can yield nearly six times more annual revenue than occasional visitors, providing invaluable insights for local entrepreneurs navigating economic challenges.

According to Square's analysis, regular customers—defined as those who frequent a business four or more times annually—are vital to the financial health of local businesses. In cities like Montreal, the data reveals that regulars generate up to seven times more annual value compared to one-time shoppers. This trend is echoed nationally, with repeat customers visiting establishments at least nine to ten times a year, establishing a steady revenue stream that helps businesses endure rising operational costs and economic unpredictability.

Lucas Spinosa, owner of Black Sheep Coffee Roasters in Ontario's Niagara region, emphasized the significance of these loyal patrons, stating, “We love all of our customers, but our regulars are truly the foundation of our business.” He highlighted the importance of loyalty programs, which help businesses remember customer preferences and foster a sense of trust, ultimately encouraging repeat visits.

Despite the anticipated tightening of household budgets in 2026, the report reveals a strong inclination among Canadians to support local businesses:

These statistics indicate that, instead of retreating from local markets, consumers are opting for convenience and familiarity, prioritizing proximity and positive word-of-mouth recommendations over mere price considerations.

A fascinating aspect of the report is the identification of a “Neighbourhood Network Effect,” where the success of local businesses is increasingly interlinked through shared customers and connections. For instance, 49% of Toronto businesses report sharing regular customers with at least one other nearby establishment, while this figure rises to 55% in Vancouver.

This interconnectedness has tangible economic implications, with each additional local business connection in Toronto correlating to an average increase of $2,067 in annual revenue. Notably, coffee shops often serve as community anchors, bridging gaps between various retail, food, and service sectors.

Interestingly, while regular customers may spend slightly less per visit than transient shoppers, their frequency of visits proves more beneficial in the long run. The data indicates that 84% of regulars tend to spend the same or more per visit once a rapport is established, providing businesses with a buffer against economic fluctuations.

Square's findings suggest a clear path forward for local businesses: cultivating customer loyalty is essential and deliberate. As consumer habits evolve, businesses that invest in fostering relationships with customers and establishing intentional neighborhood connections will be best equipped to thrive.

Karisa Marra, Head of Sales at Square Canada, stated, “When Canadians build local routines — a coffee, a haircut, a quick stop at a shop — they’re doing more than running errands. They’re strengthening a connected network of neighbourhood businesses.” Square aims to support this growth by equipping small businesses with the necessary tools to recognize regulars and deepen loyalty, ultimately powering vibrant local economies.

The Square Local Economy Report serves as a vital resource for small businesses seeking to navigate the complexities of the current economic landscape. By focusing on nurturing relationships with loyal customers and leveraging neighborhood networks, local entrepreneurs can position themselves for sustained growth amid ongoing challenges. As the local economy evolves, the emphasis on community and connection will remain at the forefront of successful business strategies.

For further details, the full report can be accessed through Square's website.