There’s a new report out this week from Alignable, a business networking platform, underscoring the hastening deterioration of America’s small business backbone. Beset by crippling inflation, expanding automation and the ubiquitousness of national big box retailers, small- to mid-size businesses (SMBs) in America are limping into the holidays in worse shape than ever before.
According to the report, a stunning 49 percent of SMBs surveyed said they were making “half or less than they did monthly” prior to the 2020 Covid-19 pandemic. That number was up seven percentage points from October – and is the “biggest surge in monthly revenue losses this year.”
Alignable surveyed 2,833 small business owners nationwide between November 2 and November 20, 2023.
Take a look …
(Click to view)
Similarly, 49 percent of SMBs reported declining consumer spending at their locations in November – up ten percent from the previous month. That was the steepest jump in this indicator in six months – and is particularly ominous considering November is one of America’s peak shopping months.
Rising labor costs and elevated interest rates are compounding the problem, making it impossible for SMBs to improve their lot even if they have innovative ideas for untapped markets that could potentially reverse their fortunes.
So … is it time to press the panic button? Yes.
“Worried about the health of many local businesses, SMB advocates are calling for a shift away from online shopping at major national companies or big box stores, imploring consumers to come back to local merchants and spend much more with them,” Alignable’s Chuck Casto noted.
According to Casto, individual consumers spending as much of their money as possible on businesses within their communities is critical to maintaining the health of those communities.
“For each dollar spent with a locally owned merchant, 66 percent will stay in the local community, while only 1 percent of each purchase made with a national outlet will be reinvested in the local community,” he noted.
Casto added that if consumers don’t start shifting more of their spending away from online mega-retail and toward locally owned businesses, “the quality of life in small towns could be in jeopardy as more empty storefronts appear on Main Streets, giving them the look of ghost towns instead of prime destinations for local economic prosperity.”
“And as more stores close, the local tax base could decline, affecting overall property values and town or city services,” he added. “It’s a spiral every town would want to avoid if at all possible and it starts with consumers ramping up their support of local merchants.”
This media outlet is an unapologetic champion of small businesses. They are “always the ones getting squeezed … never the ones getting any help,” I noted in a recent column.
This holiday shopping season, the squeeze is becoming suffocating … which means it is up to those of use who care about out communities to take steps to save them.
“Shop local” is more than just a buzzword this holiday season … it is a matter of live and death for these businesses.
ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven (soon to be eight) children.
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