By Victoria Budiono, Photo by George F. Lee 

When Lei Akana shops for gifts or grabs a bite to eat, she is not just making a purchase — she is casting a vote for the kind of Hawaii she wants to live in.

“Supporting local businesses isn’t just about shopping; it’s about sustaining our community and culture,” said the 24-year-old Kaimuki resident. “It’s not just a product. It’s a connection to place, to people, to Hawaii.”

Akana remembers how many beloved small businesses didn’t survive the COVID-19 pandemic, a shift that changed how she and many of her peers think about where their money goes.

“Since then, I’ve made a conscious choice to shop local whenever I can,” she said. “We can’t complain about losing culture if we don’t support the people keeping it alive through food, art and small business.”

Akana is part of a growing national trend. A recent report by Constant Contact found that nearly half of millennials and Gen Z consumers actively seek out small businesses each week — nearly twice the rate of baby boomers.

The report also revealed that 83% of Americans would be upset if a favorite local business closed, with 40% saying they’d be “devastated.” Many cited quality, personalized service and community impact as key reasons for supporting local enterprises.

That growing intentionality by young consumers is a bright spot for Hawaii’s small-business sector, even as it continues to grapple with steep challenges ranging from natural disasters to soaring costs.

According to the U.S. Small Business Administration’s 2023 profile, Hawaii added 2,098 small-business establishments between March 2021 and March 2022. Small businesses now make up 99.2% of all enterprises in the state and employ nearly half the workforce.

Still, the landscape remains fragile.

During the pandemic, more than 1,000 businesses in Hawaii permanently closed, including longtime institutions such as Love’s Bakery and Like Like Drive Inn. In Lahaina, the August 2023 wildfire devastated an economy driven by nearly 1,100 small businesses.

According to the state Department of Business, Economic Development and Tourism, the disaster impacted more than 800 businesses that employed approximately 7,000 people and generated $2.7 million in daily revenue. About 600 of those businesses have since shut their doors for good.

The sense of loss has reinforced how much locally owned businesses mean to people, particularly members of younger generations who are now more likely to prioritize local shopping.

“They vote with their dollars, which is something I’ve always preached,” said Garrett Marrero, co-founder of Maui Brewing Co. “Younger generations are willing to spend more for a higher quality product or a business that aligns with their values. But they’re also going out less; they’re being more intentional.”

Marrero, who started his company at age 26, said the brand has evolved in response to consumer values. The Maui Brewing Co. product line now includes seltzers and ready-to-drink cocktails aimed at customers who care about transparency, quality and community impact.

“These stories resonate because younger consumers want to align with companies that share their values,” he said. “They’re not just looking for another beverage; they want something authentic they can connect with.”

That sentiment is becoming essential for small business survival. Dave Charest, director of Small Business Success at Constant Contact, which offers digital marketing services to small businesses, said younger buyers are actively reshaping market behavior.

“For Gen Z and millennials, it’s not just about convenience or price,” Charest said. “It’s about values. Community. Sustainability. Small businesses have an opportunity to tap into that by being who they authentically are and telling that story well.”

Still, systemic hurdles remain. A February report by the University of Hawaii Economic Research Organization found that nearly 30% of the state’s small businesses struggle to access funding, with 42% citing high interest rates as a barrier. Additionally, 38% report difficulty hiring and retaining staff, often due to wage constraints and a limited labor pool.

Marrero said that despite consumer support, the business environment remains tough for entrepreneurs.

“There’s a lot of government bureaucracy. Labor, utilities, insurance — everything is more expensive here. And the tax structure doesn’t help,” he said.

In the wake of the Lahaina wildfire, the U.S. Chamber of Commerce Foundation in partnership with American Express launched the Maui Small Business Recovery Grant Program, offering $5,000 grants plus coaching and mentorship. Though only 100 businesses received funding, nearly 1,000 applied, according to the foundation.

Other new initiatives include the Chamber of Commerce Hawaii’s 2030 Blueprint to promote economic diversification and local enterprise, and the Impact SmallBiz Accelerator, which mentors early-stage entrepreneurs.

Charest said that amid all the challenges, the key for businesses is building strong customer relationships and staying visible.

“The biggest thing is connection,” he said. “Word of mouth still matters. Consistency still matters. Even when things are hard, the businesses that focus on the customer experience are the ones that find a way through.”

That sense of connection is what’s important to Akana and consumers like her.

“I’d rather spend a little more knowing my money’s staying here and helping someone’s dream,” she said. “That’s how we keep Hawaii, Hawaii.”

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