Indio business owner Wendy Sease has felt the effects of inflation in almost every aspect of her store. (Photo by Emma Hall.)
Tuesday, April 30, 2024
By Emma Hall
Durham’s Indio owner Wendy Sease said inflation has hit her store in multiple ways.
Rent, shipping, labor and supplies have all increased. Sease said she has struggled to keep up with the changing costs.
“Everything runs so tight,” Sease said of Indio. “You don’t have an excess of labor. You don’t have an excessive inventory, so there’s not a lot of places where you can make up for things.”
One area that has noticeably affected her businesses is shipping. She said it is getting more difficult to have products shipped to her and to ship products to her customers.
She also has seen increased labor costs affect her business. Because of inflation, she said she wants to pay her employees well but doing so affects how many people she can hire.
“I have less labor because I pay my people more money,” Sease said.
All of this means Sease has had to increase the prices of her products. She considers her shop to be a place where customers can buy good quality moderately priced products, which is getting harder to do.
“It’s just making my job harder, which is to carry things that are nice and not ridiculously expensive,” she said.
During 2022 and 2023, the Federal Reserve raised the federal funds rate to tame inflation.
The Federal Reserve’s goal is not to get prices back to what they were in 2019 because this would lead to deflation, or a decline in prices that is often even more harmful to the economy than increasing prices, according to Michael Walden, NC State emeritus economics professor. Instead, he said we are starting “at a new level.”
“What we’re trying to get to is an inflation rate that people can live with, particularly that the average person’s annual pay increases exceed that rate, in this case, that 2%,” Walden said.
But how far is the Fed from this “magical” 2% inflation rate?
Inflation so far in 2024 is just over 3% when compared with a year ago – far below a 40-year high of 9.1% hit in June 2022.
While inflation is getting closer to the Fed’s target rate, “The big economics question right now is ‘When will the Federal Reserve begin cutting interest rates?’” Walden said.
Diane Joyal, owner of Bowerbird Flowers and Apothecary in Durham, said she relishes the idea of relief brought on by lower inflation.
Joyal has been running Bowerbird since 2014 and said she keenly felt the impact of, first, the pandemic supply-and-demand challenges then post-pandemic inflation.
“The last couple of years have been really intense workwise, so it created industry-wide and an extraordinary demand for a limited product and prices have gone up,” Joyal said.
Joyal said she has had to pass along the price increases to customers, meaning the bouquets she sells are more expensive now.
Bright Black, a local candle store, is in the same situation.
“It’s shipping. It’s our cost of goods sold. It’s rent in Durham,” owner Tiffany Griffin said.
Because Griffin has a specialty store, she said she wants to keep her goods accessible and affordable while also continuing to pay for “high-quality fragrances.”
If she had the extra influx of cash that was not being eaten up by increased prices, she said she would focus more effort and resources on marketing her product since her company has partnerships with well-known brands like Crate and Barrel and the NBA. However, she is not able to advertise these partnerships because she doesn’t have the funds for marketing campaigns.
“I really feel for small businesses because when we have a bout of higher inflation, when prices are rising faster, a lot of consumers just look at the final product,” Walden said.
The final product may be all that the customer sees, but for these Durham small businesses inflation has affected almost every aspect of their day-to-day business.
