Every industry is being impacted by inflated costs, but retailers seem to be getting it the worst.
Retail Dive recently reported that according to recent report findings by Alignable, a referral network for small business owners, the industry is poised to lose more than half of their companies.
Per the findings, nearly half of small business owners, including 59% of retailers, shared they’re at risk of shutting down before winter, a jump from 12% from the 35% that said the same a year ago.
It looks even more troubling for minority-owned businesses (52% could be shuttered by fall) and women-owned businesses (53%). It looks like those in certain parts of the country are more susceptible to financial struggle. Small retailers in Colorado, Michigan, Ohio, Pennsylvania, Texas, North Carolina, California, Illinois, Florida, New York, New Jersey and Georgia, are at significant risk.
In 2020, about 160,000 businesses indicated on Yelp that they were closed. “Overall, Yelp’s data shows that business closures have continued to rise with a 34% increase in permanent closures since our last report in mid-July,” Justin Norman, vice president of data science at Yelp, shared with CNBC. “Despite the hard hit small businesses have certainly taken, we’ve seen that home, local, professional and automotive services have been able to withstand the effects of the pandemic better than other industries,” Norman noted.
Overall, small business owners have had to reduce their inventory, slash marketing costs and look for other ways to salvage their finances. Forbes reported that 41.5% of small businesses shared they have experienced significant financial stress in the last 3-5 months.
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