Small businesses are being hit big by inflation and it is driving up their operating costs significantly.
- Everyone in the U.S. has been affected by the skyrocketing inflation costs, but one thing has been hit really hard—small businesses.
- U.S. inflation rates have hit record highs in the past few months sending gas, rent, and food prices soaring.
- Small businesses owners across the country reported seeing over a 30% increase in costs.
- The price of flour rose 23% in the past year…
- The price of butter rose 25%…
- The price of eggs increased 39%, according to the Consumer Price Index data published by the Bureau of Labor.
Why it’s news
The high rates can be credited to many factors, but one of the main reasons is that the country is just now seeing the effects of the COVID-19 pandemic.
Small businesses are essential to the U.S. economy.
According to a report issued by the Small Business Administration (SBA) in 2019 before the pandemic, small businesses accounted for 44% of economic activity in the United States, created two-thirds of new jobs, and delivered 43.5% of the United States’ gross domestic product (GDP).
Now with rising costs brought on by inflation, small businesses are struggling to stay afloat.
These prices reflect a year-over-year change and are a huge difference from the price of items pre-pandemic.
Business owners are trying to not raise costs for customers as they struggle to face the costs themselves. Many have opted to try cheaper packaging and ingredients to try and cut back on some of the extreme costs.
If rates don’t begin to drop soon many small businesses fear that their doors won’t remain open for long and communities will lose valuable businesses.
“If you want any kind of local flavor, if you want any personality in your community—it comes from those small businesses,” said small business owner, Molly Kohrman. “Without these local businesses you are going to lose so much of the community.”