Poll: Inflation stole holiday profits from small businesses

Matthew Fazelpoor//December 14, 2022

Goldman Sachs 10,000 Small Businesses Voices is out with a new Small Business Pulse Poll that finds more than half of small business owners have not met profitability expectations, even as revenues and sales for larger businesses hit record highs.

The respondents feel they are getting squeezed this holiday season, according to results released Dec 14., with inflation serving as the Grinch that stole their profits.

“Small businesses are the backbone of America. Yet, as we enter this holiday season, we are finding it harder than ever to succeed,” said Janice Jucker, president and co-owner of Three Brothers Bakery and a member of the 10,000 Small Businesses Voices National Leadership Council. “As our economy teeters on the brink of a recession, it’s more important than ever that Washington provide small businesses with the resources we need not just to get by, but to get ahead.”

In early December, the poll surveyed more than 300 small business owners in the consumer product retail/wholesale, food and beverage retail/wholesale, and hospitality/restaurant sectors to capture their holiday season sentiments.

Some key findings include:

Compared with last year, 52% of small business owners say profitability has not met expectations, even while 79% have increased prices versus last year.
40% said that demand has decreased compared with last year, with 33% saying it has stayed the same.
84% believe bigger retailers have a competitive advantage this holiday season due to their ability to better withstand inflationary pressures and offer lower prices.
Inventory planning remains a challenge for small businesses with 27% reporting that they currently have excess inventory for current demand.

Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices, says that small businesses across the country are doing more with less this holiday season.

“It’s critical that Washington meet their needs, and we are committed to ensuring that the voices of small business owners are heard at the highest levels of our government,” said Wall.