Everyone is feeling it. At the gas pump, the grocery store and in the housing market, everyday Americans are facing higher prices due to rising inflation. So are small business owners.
On Wednesdays and Saturdays, over 100 local small businesses gather to sell their goods at Uptown Farmers Market in Central Phoenix. Walking through the market, you’ll see businesses representing artisans from all walks of life: bakers, chefs, florists, farmers, woodworkers, crafters, potters and soap-makers — just to name a few.
Many small businesses have faced challenges over the past two years because of the ongoing COVID-19 pandemic. According to an April 2021 study done by Federal Reserve researchers, the exit rate of businesses, or the rate of business failures, was 25 percent to 33 percent above average during the first year of the pandemic.
But with hope on the horizon as pandemic restrictions are being eased nationwide, small businesses are facing a new foe — rising inflation.
“Everything has doubled or tripled in price,” Elizabeth Noble, owner of Powder Room Soaps, said. “When we first started, citric acid was $50 for 50 pounds and now it’s $250 for 50 pounds.”
The consumer price index, an index often used to measure inflation, rose 8.5 percent across all industries over the past 12 months, according to data from the U.S. Bureau of Labor Statistics.
Emily Heller, the owner of Bene Vivendo, a business that sells organic, locally grown flowers and produce, said that all the prices of her business’s raw materials have gone up.
“Seeds, organic fertilizer, even the plastic and glass containers that I use for hygienic packaging and presentation at market — everything costs more.”
Joanie Mahar, owner of Joanie’s Sweet Treats, said that her business is facing higher prices, and that she’s seen the price of butter almost double. And similar trends are being seen at other Valley farmers markets.
John Bergt, the “head cookie bagger” of his wife Elisabeth Bergt’s business, Shut My Mouth Bakery, said, “Our costs have gone up. Butter has gone up, eggs have gone up, flour has gone up — everything’s going up.” Shut My Mouth Bakery sells at a few Valley markets, including Roadrunner Park Farmers Market in Phoenix.
Raphael Uduhiri, owner of Naija Grille Spice Mix, a company that makes all-purpose spice mixes and sells at several Valley markets, shares the same struggle of rising prices with Bergt.
“It’s tough because, you know, you’re tempted to just raise your prices,” Uduhiri shared.
Despite the price increases for raw materials, some of the businesses are fighting to keep their prices low. But it is unclear how long that fight will last.
Mahar said that she is still trying not to raise prices at her business, but that she thinks for business owners to make a living, they are going to have to raise their prices eventually.
Noble added that although she has not raised prices at her business yet, it is a struggle not to.
“It shouldn’t be crazy expensive for soap or bath bombs and all that,” she said.
Bergt and Uduhiri also said that they are struggling to not raise their prices. But there may be some hope for business owners that do need to raise their prices.
Heller said that while she did have to raise her prices, she still has the support of her customers.
“I have not encountered any difficulties with the customers that I have. They understand that when things cost me so much more, I have to pass that on. It is challenging.”