Nearly 90% of small businesses have been impacted by inflation

In a recent report conducted by the marketing company Constant Contact, 89 percent of small business owners said they’ve been impacted by inflation. In that same report, more than half of shoppers said they were less likely to shop at local businesses because of rising costs.

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Local business owners say they are feeling those effects.

“There’s times where it’s just the dead down out here,” said Atascadero business owner Dale Fisher.

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Fisher owns three local stores off of El Camino Real. In the nearly 12 years he’s been a business owner, he says this December is the worst as far as sales go. He says nearby store owners have told him they’ve hit less than half of their usual sales.

“Inflation has gone up, “Fisher pointed out. “Prices have gone up on many things to cover cost, employees’ wages have skyrocketed up forcing more things to go up, so things have slowed down and some pocketbooks have tightened.”

In addition to prices increasing, he says the combination of downtown road construction, the cost of living, and people tightening their wallets has contributed to the slow pace downtown. However, the downtown shopping program has helped some.

“The shop local program was a great idea when they first started it,” Fisher said. “Back when the project started the first go around, it was tremendous. It was good. It brought in some heads.”

The Constant Contact study found that because of the current state of the global economy, customer habits are putting pressure on small businesses to increase their foot traffic during the final months of the year.

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“Most Americans do want to support small, but it’s good to make sure you’re making a conscious effort to do that because it impacts the local community as much as the business owner does because it’s a critical time of the year for them,” said Dave Charest, Constant Contact Director of Small Business Success.

Many businesses also reported relying on a strong holiday season to make ends meet. Forty-six percent have cut back on expenses to manage costs, while 39 percent have raised prices.

The percentage of consumers in the U.S. planning to decrease their spending at small businesses (52 percent) has almost doubled since 2022 (27 percent).

“Business owners have had to one, raise their prices in some cases, work more efficiently and maybe cut back on some things,” Charest added. “And shoppers have had to do the same thing.”