Today, the Bureau of Labor Statistics reported that inflation rose 1.2 percent from February to March and 8.5 percent on a year-over-year basis. Leading the way were energy prices, up 32 percent year-over-year. Both fuel oil (up 70.1 percent) and gas (up 48 percent) prices increased dramatically. Food prices also rose sharply, up 1.5 percent over February and 10 percent year-over-year.
Inflationary pressures have reached Main Street retailers across the country and have them wondering how to engage price-cautious customers while keeping goods at reasonable prices. We spoke with four small retailers to learn more about how inflation is affecting their businesses and what Congress can do to help bring inflation under control.
Consumers are cautious about rising prices
Angela Hawkins, owner of Atlanta-based luxury bedding company Bamblu, says her company experienced a groundswell of support from customers who were eager to support small businesses that were hit hard by the COVID-19 pandemic. Now that prices are going up, Hawkins wonders if that support will continue as customers weigh where to spend their money.
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“Customers are experiencing higher prices from grocery to gas to shelter,” she says. “At what point does the support of small business get impacted by the basic living cost increases we are seeing across the board?”
Wholesale and vendor prices are skyrocketing
Other small retailers like Gary Novotny of Gary Michaels Clothiers in Lincoln, Neb., are seeing rising prices at the wholesale level that leave them with no choice but to raise prices on goods in their stores.
“My vendors’ prices are skyrocketing at the wholesale level,” Novotny says, adding that the price increases are happening rapidly. In just one year, “a sweater knitwear vendor increased its retail pricing from $475 in fall 2021 to $595 for fall 2022 for the same sweater,” he says.
Sarah McDonald of Out There Outfitters in Wayne, Pa., reports price increases from some of her vendors with more on the way. “We've seen 10 to 25 percent price increases across the board from our vendors and expect a second wave of increases this summer,” she says. In addition to higher costs from vendors, her customers are also feeling the impact of increased costs on everyday goods and services. “Now I’m anticipating them feeling the sticker shock at my store since I have no choice but to raise my prices,” McDonald says.
Opportunities for relief
If Congress and the administration do not act, retailers and consumers will continue to feel costs pressures from inflation. That’s why NRF launched our Tame Inflation Now campaign. The campaign urges action on four legislative and regulatory proposals that could help bring inflation under control. This includes enacting legislation to address the supply chain crisis, repealing the failed Section 301 tariffs, addressing the labor shortage through smart immigration reforms, and lowing the costs of transactions by increasing competition in the payments system.
For Trey Kraus of Carltons Men’s and Women’s Apparel in Rehoboth Beach, Del., relief from inflation is critical to his small business and others. “Inflation has never been a good thing for small businesses,” he says. “We need a more effective effort to combat this intense inflation.”
Relief can’t come soon enough for McDonald, who is increasingly frustrated with compounding challenges to run her business after fighting to stay in business throughout the pandemic. “It’s been a long road over the last two years and inflation is one more hurdle to overcome to stay in business,” she says. “Everyone is exhausted. We must tame inflation now.”
Join NRF in calling on Congress and the administration to tame inflation now by participating in our grassroots campaign.