As the year progresses, many of us are starting to see COVID in our rearview mirror. The percentage of people receiving at least one vaccination is approaching 70%; herd immunity is increasing; masks are disappearing; restrictions on crowd sizes are easing; even New York state, after 474 days, has finally declared an end to its state of emergency. Locally, the latest survey from the Retail Alliance shows signs of increasing optimism in our local business community. Europe has even reopened to outside visitors. The only thing left to do, start singing a resounding rendition of “Happy Days Are Here Again!”
While the news in the above paragraph is undeniably fantastic and very well-received, it is not the case for everyone. A recent survey by Alignable of 3,800 small businesses across the country shows that not everyone is experiencing the impact of the rising tide of consumer confidence and a corresponding increase in spending.
These challenges are not limited just to Main Street … 40% of companies in construction, transportation, travel, beauty, and entertainment are reporting ongoing difficulties in various areas. These include rising supply costs that are affecting 55% of those businesses surveyed. This is followed by 48% of respondents reporting fewer customers coming through the doors, thus reducing purchases. And 57% of businesses surveyed report that they are generating less than half their pre-pandemic sales.
Recruiting and maintaining an adequate workforce continues to bedevil employers in that 55% of respondents have found it more difficult to hire employees. Of this number, 34% indicate that it is significantly more difficult. The impact of increased minimum wages is now being felt, as 46% of those surveyed report employee costs increased by 11% and, in some cases, the increase is more than 25%. These rising employment costs, coupled with an increase in the costs of raw materials and supply chain disruptions, are squeezing hospitality and food service businesses especially hard.
Data on the pandemic’s continuing impact on minority business owners shows some very disconcerting information. While 37% of all business owners report having a hard time making rent payments, the number of minority business owners with the same issue increases to 53%. This is an increase of 8% from the preceding month. The survey also indicated that minority and other small business owners lack access to financial resources and other means of support. The recently announced Community Navigator Pilot Program Notice of Funding Opportunity could be a means to address these shortcomings. The Hampton Roads Chamber, along with chambers and other organizations throughout the region, is applying to host this program.
In Hampton Roads, there is an alarming lack of access to capital for borrowers looking for loans less than $50,000. Unfortunately, this situation is not related to the pandemic. This has been a long-term concern since the demise of the Center for Community Development. This organization provided microloans from $500 to $50,000. When it ceased operations, the region experienced and continues to experience the inability to help small, minority, and other businesses grow.
While the reduction in the pandemic threat has had both a tremendously positive physical and psychological impact on business as a whole, smaller businesses, especially minority-owned, have yet to fully participate in the recovery.
Persistence and patience should be our watchwords; our region’s recovery from this pandemic was never going to be a sprint but rather a marathon. We have to stay focused on the ultimate objective and dedicate and redouble our efforts to ensure that all the region’s businesses survive, recover, and, eventually, thrive. Our region has the tools, the mindset, and the wherewithal to make this happen. We just need to stay the course.