Inflation has been rising at nearly the fastest pace in 40 years, driven up by strong consumer spending and higher costs for food, rent, medical care, and other necessities.
NEW YORK — Inflation isn’t only costing small businesses money. It’s costing them customers as well.
“He said I’m going to start making coffee at home, I need to budget, so I won’t be coming in here every day,” she said. “I feel like I’ve been on a goodbye campaign.” Ninety-seven percent of small business owners say inflationary pressure is the same or worse than it was three months ago, according to a survey of more than 1,500 small businesses by Goldman Sachs 10,000 Small Business Voices. Sixty-five percent have raised prices to offset higher costs. And 38% say they’ve seen a decline in customer demand due to price increases.
“Among a lot of my older customers, who are on restricted income like Social Security, they say they have to cut back,” she said. “They say, ‘I know I need these tires, but I need to make a couple more rounds to save up.’”“Right now , it kind of sucks because costs increased faster than I could catch up with. In time, I hope people budget better and their incomes change to reflect the economy.”
“Last year has been challenging to say the least,” she said. “All prices across the board have gone up.” Everything from cardboard, containers and the food that she includes in the baskets have become more expensive. “We are a ‘want to-’ not ‘have to-’ have item in our primary categories,” Shanahan said. “What we sort of see is people maybe buying a $50 gift dropping down to $35. And the whole lower tier aren’t even buying at all, they don’t have the discretionary funds.”