Omicron’s rise is hurting small businesses in the U.S. by Reuters

By Brad Brooks and Jonathan Allen

LUBBOCK, Texas (Reuters) – Phillip Howard pointed to a pile of black ski pants piled on a counter in his winter sports shop as proof of the obstacles small business owners face as the pandemic progresses.

The pants were due to arrive in August at Troy’s Ski Lubbock store in west Texas – before the hot five-month season began in October. Instead, they came from China in the first week of January, delayed by supply chain failures.

“Products that arrive late really kill us,” Howard said this week, noting that many other items also arrived late, missing the pre-holiday sales season. “I’ve been in this business for almost 20 years, and I’ve never seen anything like it.”

As the pandemic enters its third year, many small businesses in the United States are besieged on three fronts: deepening supply chain problems; periodic staff shortages; and fewer customers appear in some areas, fearing a rise in Omicron in COVID-19 cases.

This week the Federal Reserve released its latest collection of anecdotes about the state of the economy among national companies, labor groups and others, and shows that the rapidly expanding Omicron variant was exacerbating difficulties, especially in hiring and inflation.

U.S. retail sales fell 1.9 percent in December amid a shortage of goods and a plethora of infections, the Commerce Department said Friday.

While federal aid and the general economic recovery have kept failure rates and bankruptcy rates for small businesses much lower than expected, day-to-day management has become a challenge for management. Census surveys conducted since the beginning of the pandemic show that it is constantly shifting from declining cash reserves and seeking funding to supply chain challenges and rising costs.

“I’m making orders for next year, and we’re looking at double-digit inflation,” Howard said. “It will probably be 10% off for almost everything I need to apply for.”

‘BIG AGAIN’

Staff shortages Gage & Tollner, Brooklyn, New York, XIX.

St. Co-owner John Frizell estimates that about 30% of the nearly 60 people who work at the restaurant have had COVID-19 in the past month. Owners wanted employees to have a negative coronavirus test before returning to work, but this often meant that staff spent hours waiting in line to splash around.

“We just need tests, lots and lots of tests,” he said.

Governor Kathy Hochul this month approved a proposal to allow New York to permanently allow restaurants and bars to “go” to sell cocktails, an emergency provision imposed when establishments banned customers from sitting inside in 2020.

At Junior’s Restaurant and Bakery, known for its cheese cakes, owner Alan Rosen said he had supply chain problems and staff shortages. Sometimes he had to pull the whole section of his restaurant around when there weren’t enough waiters to walk around.

“The costs of our goods are on the roof, there is inflationary pressure, the supply chains are a mess,” Rosen said.

Amy Glosser moved to BYKlyn, her cycling studio, for new outdoor venues in the summer of 2020 to keep Brooklyn’s business going. But Glosser said he and his two dozen employees agreed that they could not do another winter outside, so he moved the business to a temporary indoor space on Dec. 1.

Then the Omicron variant hit New York City hard, and about 40% of the gym’s 200 members said they wanted to cancel or suspend memberships.

“People are nervous to go inside and sweat together,” Glosser said.

Randy Peers, president of the Brooklyn Chamber of Commerce, said he was concerned about the dismissal of small businesses after the moratorium on New York State pandemic layoffs ended on Saturday, and noted that one-third of Chamber of Commerce companies return their rent.

Peers said optimism grew in the summer and early fall, with the city’s high vaccination rates and many cuts being removed. This lasted until thanksgiving.

“Then Omicron turned everything upside down again,” he said.

‘Hold your breath’

Small businesses in states where COVID cuts have been much lower than New York say customers are still coming out, but other pandemics continue to cause problems.

Mark Pectol, who owns four Zesty Zzeeks Pizza & Wings stores in the Phoenix subway area, said he never dreamed of his biggest nightmare because the owner of a small business would come up with problems in the supply chain.

“I don’t know if I’m going to have pizza boxes over the weekend,” he said. “If I don’t have a pizza box, I’ll quit the business. We’ll hold our breath.”

Although it may get pizza boxes, Pectol said it is already receiving warnings about the next flour shortage.

That would be ironically cruel. In the first year of the pandemic, when food stores were unable to store flour on shelves, Pectol said it could still buy it in bulk from its supplier. While his shops were closed during the pandemic, he continued to raise money by selling 140,000 pounds of flour to the public.

Now, the variability of supply chain failures can be turned against it.

“My distributor told me that they have flour for a month for me. But this week, they have not introduced any flour at all,” he said. “If I can’t get it from a big dealer, where can I get it?”