Rising costs add to pandemic pain for small businesses

NEW YORK (AP) — In just two weeks, the cost of pecans for the pies at Peggy Jean’s Pies in Columbia, Missouri, has surged nearly 40%, perplexing co-owner Rebecca Miller and adding to the cost of doing business. Miller will soon have to bump up the price of her Southern Pecan, Chocolate Bourbon Pecan, and German Chocolate pies by $2 to $24.

While pecans have risen the most, Miller is seeing price increases across the board, from blackberries to condensed milk and eggs. She consults with three food brokers weekly to source the lowest prices for ingredients. But she still needs to charge more for the nut pies.

“We can’t absorb that cost and still meet wage demands, increased cost of goods in our tins and boxes, and afford to live as a family,” she said.

Sharply higher costs are yet another challenge thrown at business owners by the global pandemic. The unpredictability of shipping, labor and the coronavirus itself have created an environment where owners are often left guessing about when products might arrive and how much they’ll cost. The Labor Department said Thursday that prices at the wholesale level rose a record 9.7% in December from a year ago.

“There’s a tremendous amount of not just risk — risk you can calculate — but uncertainty. We just don’t know what’s going to happen.” said Ray Keating, chief economist with the Small Business & Entrepreneurship Council. “Consumer demand is there, but there are just enormous supply chain constraints. All of this is feeding into price increases.”

In response, owners are raising prices, cutting staff hours, dropping some goods and services and nixing free shipping in a delicate balancing act. But with low visibility into how long the higher inflation will last, some owners are increasingly worried about keeping their...