Small business owners battle surging inflation

Data from the Bureau of Labor Statistics shows that inflation climbed to its highest level in 40 years in the month of January
Published: Feb. 17, 2022 at 1:52 PM EST
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NEW HANOVER COUNTY, N.C. (WECT) - With inflation surging to historic levels, small business owners across the country and right here in our community are feeling the pressure of rising costs.

Data from the Bureau of Labor Statistics shows that inflation climbed to its highest level in 40 years in the month of January with prices jumping 7.5% from a year ago.

Cast Iron Kitchen

Drea Petty, General Manager and Co-owner of the Cast Iron Kitchen in Porters Neck, said that they have seen the cost of some of their ingredients, like chicken, skyrocket.

“It’s almost double the price what it was two years ago, or even last year — definitely was $75 when we first opened and today the same case of chicken is $140,” Petty said. “We did not double our prices, but, you know, it’s that right there. And how are we as a business going to continue to make money and produce these products if all we’re doing is spending all this money?”

Drea and her husband Josh Petty, who is the chef and other co-owner of the restaurant, recently made the difficult decision to scale back their menu. Between staffing shortages and the rising cost of goods, they had to take some products off the menu to ensure they were still able to deliver the same high-quality product they are known for.

“Really we just had to kind of remove ourselves from it and our feelings on all of that and just say we cannot produce this product anymore,” Petty said. “We have this one great sandwich, but it had lots and lots of different items on it and it’s my favorite thing on the menu, but it’s gone because we don’t have enough people right now to be producing the pimento cheese and the jam for it and of these things.”

They had to raise some prices on the new menu, but they are absorbing a majority of the added costs.

“We absolutely did not raise the price of everything. We don’t want to price ourselves out, of course, so it’s the balance of that,” Petty said. “We still have to make money, but we also want our guests to come in.”

The owners also increased wages to attract more employees, which is also eating away at profits.

Martin Custom Woodworking & Antique Restoration

One thing that has really increased in price is gas and petroleum.

Surprisingly, a lot of the materials used by furniture makers, like Martin Custom Woodworking & Antique Restoration in Wilmington, are petroleum-based.

“It’s remarkable how much money we spend on petroleum-based products. From our strippers to our paints and lacquer thinners and vinyl sealers — everything is petroleum-based it seems,” said Carol Martin, the accountant for Martin Custom Woodworking & Antique Restoration.

Martin said that 25 cents on every dollar earned is spent on petroleum-based products. Their suppliers are raising prices because the cost of gas is increasing, but they can’t pass that cost on to customers.

“Our suppliers increase the prices to us, but we can’t pass that exactly along to our customers, so we’re getting a smaller margin on the bottom line,” she said. “It is concerning and we employ five men and we start at a very high wage level and we’re just trying to just keep this small company alive.”

“It’s not something you can gain back quickly – you can’t just increase your prices overnight,” said Curtis Martin, owner of Martin Custom Woodworking & Antique Restoration. “I know the restaurants have done that just because they have to to keep staff and keep product coming in, but with ours it’s kind of, you kind of got to ride it out and just eat those high charges.”

The business has been around since 1986, so they have seen a lot through the years. Curtis said that they saw a similar price increase around 2008 and 2009, but it took some time for those costs to come back down.

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