Inflation hitting small businesses

Gas, groceries all going up due to inflation. As for businesses, they're also taking the hit and it's mainly those smaller local businesses having to work twice as hard right now.

"It’s really affecting the small employer, the mom and pop operations. In restaurants the cost of food increased. The cost of working with their employees is increased. All of that is translating into lower margins for them. So they must past this cost onto their consumers, so it’s going to cost you more to have lunch at a local restaurant as well as with the national chains," says Mickey Cargile, Founder and Managing Partner of Cargile Investment Management. 

Store owners having to rise their prices you see on clothing and restaurants having to increase their menu items. "Merchants have to pass on their increase cost to their consumers and that’s why we’re seeing an increase in every single thing we buy," says Cargile.

Just because you are being charged more, doesn't mean they're bringing in more money for themselves. "Increased cost doesn’t mean the merchant is making more money they’re probably making less because they’re having to pay a higher cost for everything that they’re serving to you," he says.

Studies show that for small businesses to deal with inflation 67% of them have raised prices.

With more of them still bouncing back from the pandemic, now inflation is what they have to battle with now. "There is no policy or magic switch to fix this. Only time can bring the supply levels prices go up eventually they will destroy demand and so that will help the equation as well," says Cargile.

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