October 2022

Everyone has their opinions regarding the central factor most responsible for supply chain disruption. It's a debatable issue. Some point to COVID-19's hangover effects, others say it's a product of continued bottlenecks at major shipping ports, even though conditions have significantly improved from where they used to be during the height of the pandemic.

The ongoing truck driver shortage just may be the biggest supply chain obstacle of them all. While motor carriers, retailers and other organizations that rely on truckers have raised wages — often substantially, including for those just starting — there remain far more openings than job applicants. And when roles do get filled, the gains are frequently offset by other more seasoned drivers retiring and burned-out employees opting to leave the profession altogether.

The best way to reverse trucker turnover while steeling your supply chain is to get out ahead of it. Here are a few tips that can be effective, whether you're experiencing it now or are seeking a solution before it becomes a problem:

Install a feedback program
Every exiting employee — truck driver or otherwise — has a reason for leaving. People are often reluctant to say what's bothering them, though, for fear of how it will come across. A feedback program can change that reticence. A feedback program serves as a centralized, anonymized way to gauge how your crew members are feeling about their work environment, what they like and dislike and if there are any aspects of their jobs they would like to see changed. Emphasizing that the feedback is anonymous is crucial to increasing participation and ensuring employees are as honest and forthcoming as possible. Once they offer their input, you may be able to identify trends among respondents that can help you make the appropriate adjustments.

Key to truck driver retention is their happiness.Key to truck driver retention is their happiness.

Pay attention when a driver routinely arrives to work late
Be it 10 minutes to over a half hour, showing up to work late happens to everybody now and then. But when it happens again and again, an underlying issue is almost certainly to blame. The quickest way to nip this problem in the bud is to attack it head on by asking them the reason for their routine tardiness. What they say — and how they say it — can be revealing.

Establish an open door policy
As an employer, the overriding goal of running your business is to maximize productivity. But a big part of that is ensuring that your most indispensable asset to productivity — i.e. your staff — is satisfied. That's why it's of supreme importance for drivers to feel comfortable coming to you with any concerns that they're encountering. Employees frequently keep their emotions bottled up because they think their problems can't be addressed. While it's important for workers to understand that they all have a job to do, they should also be secure in the knowledge that their opinions matter and they're valued. When the members of your team know you have their back because you attend to their needs, they'll be more inclined to have yours as well.

Smeared on toast or melted for use in classic desserts like cookies and cake, butter is a delicious and ubiquitous condiment; it pairs well with savory and sweet foods alike. But with the dairy industry encountering production challenges and the holiday baking season around the corner, prices for butter are up appreciably — and the trend is expected to continue. 

With inflation already a major drag on the economy, diminished output — paired with elevated demand — is placing added pressure on the cost of butter. In August, for example, butter production fell 10% when compared to July, according to the Department of Agriculture. The USDA assesses the nation's stockpile by the amount of butter that producers have in cold storage.

Not only has butter volume fallen on a month-over-month basis, it's also down year over year. Indeed, volumes were down by 22% in August versus 12 months earlier, the USDA reported.

Not surprisingly, the average selling price for butter is climbing. For the week ending Sept. 24, a pound worth of Grade AA butter cost $3.17, based on the most recent data available from the USDA. That's a three-cent uptick from seven days prior, up from $2.97 on Aug. 27 and from $2.66 per pound during the first week of 2022.

Dairy cows are producing much less milk, which is placing upward pressure on food prices.Dairy cows are producing much less milk, which is placing upward pressure on food prices.

As previously noted, food costs have elevated steadily over most of the year due to a combination of factors fueling inflation, such as growth in the money supply, reduced refining activity for oil and supply chain challenges. But making matters worse are dairy cows who haven't produced as much milk. Tanner Ehmke, lead economist for dairy and specialty crops at the financial institution CoBank, told MarketWatch oppressive heat took a toll on cows over the summer, so butter producers have been drawing from less milk to make butter. With farmers forced to raise their prices, butter makers, must follow suit, trickling all the way down to the end user consumer.

Leanne Cutts, president and chief operations officer for Canada-based dairy company Saputo, said during an August earnings call that market dynamics relative supply and demand are forcing the company to re-evaluate its operations to remain competitive.

"It's clear that the milk pool has declined," Cutts said. "And therefore, we will need to ensure that our network going forward absolutely reflects this reality."

Dairy farmers challenged by rising costs
But it isn't just inauspicious weather patterns that have led to less milk. It's also a symptom of less dairy farming activity because of the high cost of doing business. Speaking to MarketWatch, National Milk Producers Federation Chief Economist Peter Vitaliano noted that diminished output happens now and then for farmers. When it does, they compensate by buying more cows. But with their food costs higher for feed types like corn silage, soybeans and grain, increasing the size of their herds would inevitably lead to diminishing returns.

Seeing the writing on the wall, some dairy producers are focusing on other products customers turn to them for, such as yogurt, cream cheese and cream. Supply Chain Dive reported manufacturers in the Northeast are devoting their resources to maximizing output of these kinds of products, which are all used more heavily during the holidays for traditional drinks and desserts like eggnog and pies.

From key ingredient shortages to surging prices for traditionally inexpensive staples like milk, wheat and butter, the food supply chain is in a severe state of disrepair — and disarray. Just about everyone is feeling it, too, from the end consumer to grocery stores, restaurant chains and sole proprietorships, wholesale entities, farmers and distributors. In many respects, these challenges are a carryover from COVID-19's impact, as 96% of restaurants encountered supply delays last year affecting foodstuffs that are essential to operations, according to a National Restaurant Association poll.

The persisting bottlenecks remain noteworthy, however, because the pandemic — for all intents and purposes — is over. But if that's indeed the case, why are food supply chains still struggling so mightily? Here are a few contributing factors:

1. Soaring inflation
The rising cost of living has a way of affecting just about everything, since just about everything business related costs money. And the food industry is feeling the pinch, forcing companies to trim their productivity to remain profitable. As a separate survey from the National Restaurant Association points out, nearly 90% of respondents are spending more on business expenses than they were in 2019.

2. Hiring challenges
Inflation occurs for a variety of reasons, but at the root of it is too much money chasing after too few goods. In other words, demand is vastly exceeding supply. In the food industry, much of this stems from so many positions going unfilled. From grocery stores to restaurants to warehouses and more, just about every business with any affiliation to food is struggling with hiring. The truck driver shortage is also contributing to the food industry's labor woes, since truckers are the ones who transport the equipment, ingredients and other materials the industry needs to produce the goods customers buy.

Grocers, restaurants, manufacturers and other food-related businesses are in recruitment mode.Grocers, restaurateurs, manufacturers and other food-related business owners are in recruitment mode.

Plus, since customers have more channels to select from when it comes to how they buy food — such as e-commerce or curbside pickup or delivery via a third-party app service provider — fulfilling these orders requires that many more workers. Not having them creates inconsistencies that cause a chain reaction throughout the supply chain.

3. Problems with packaging
For convenience, ease of handling, safety, storage and hygiene, food needs to be properly packaged and bundled while getting ingredients and other edibles from Point A to Z and all the spaces in between. But just as certain comestibles are hard to come by, the same can be said for packaging materials.

This is particularly true when it comes to the plastics and aluminum cans needed for the bottling of beverages like soft drinks, water, juices and others. As The Washington Post reported late last year, 13% of beverage options that are typically sold in grocery stores weren't available this past December. That compares to an overall out-of-stock range of between 5% and 10%. These bottling dilemmas are still in place today, which is why many alternative flavor options or choices — like zero calorie, light or caffeine-free — aren't as widely available as the products brands are known for or sell the most of.

To paraphrase a familiar axiom, you don't fully appreciate the things that make your day-to-day business affairs possible until those things either aren't there anymore or aren't performing. This was a sentiment shared by just about every product-based company during the pandemic, when the efforts designed to stamp out COVID-19 wound up wiping out supply chains more than anything else. Many of those supply chains remain in rough shape in a variety of respects, from raw materials being hard to come by to staffing shortages. As a recent survey from the National Federation of Independent Business found, close to 50% of small-business owners have more open jobs than they do workers.

Shoring up staff is a good way to increase supply chain resiliency, which companies are trying to do more of today to ensure theirs has what it takes to stay together when it's taxed in the future.

It can also help strengthen collaboration, which a number of successful supply chain leaders point to as something that helped their supply chains stay supple when the coronavirus struck.

During a recent roundtable event held in Nashville, Tennessee, several supply chain leaders reflected on how their operations fared during the pandemic and what enabled their supply chains to bend, not break. They all agreed that collaboration served as a binding agent. Here's how:

1. Collaboration increases inventory visibility
From the toilet paper shortage to months-long back orders for home-based exercise equipment, insufficient inventory was a huge problem throughout the lockdown. These issues largely stemmed from organizations lacking visibility into the products they had available and how quickly they could have them ready for delivery.

Sara Thomas, vice president of inventory management operations for Target, said insight into inventory hinges on accurate information, and the cornerstone to good information is collaboration, when everyone can trust it's coming from reliable sources, Supply Chain Dive reported. Thomas said collaboration can enhance visibility by the sharing of information, which builds transparency and provides stakeholders with the data they need to determine whether what they have in inventory is adequate or inadequate.

Technology, like enterprise resource planning solutions, provide superior visibility into supply chains and workflows.Technology, like enterprise resource planning solutions, provides superior visibility into supply chains and workflows.

2.  Collaboration increases communication
Collaboration and communication have a synergistic relationship; you can't have one without the other for either to work. Dawn Green, who serves as vice president of procurement for Schneider Electric, noted that organizations that performed the best during the pandemic all had regular contact with their suppliers. This enabled them to maintain supply if their primary supplier was offline or unable to meet their orders due to mitigating circumstances. She added her company is invested in building more trust with her suppliers which  involves providing them insight into Schneider's expectations and goals. This way, suppliers and retailers can align their respective work processes.

Kristi Montgomery, vice president of research, innovation and development at the Kenco Group, also noted how open communication can help organizations' recruit and retain talent, which has been problematic for a number of business owners since COVID.

3.  Collaboration and technology
From enterprise resource planning software to supply chain management applications, technology and cloud capabilities provide insight and visibility into supply chains like never before. Truckstop.com CEO Kendra Tucker noted that this type of technology is not only effective from a collaboration improvement standpoint, but companies have a variety of options to select from, which enables companies to pick and choose which one is best for their needs.

From BOGO offers on Greek yogurt to 50% off candy canes in the days following the holiday shopping season, discounts are a constant presence in grocery stores across the country. The question isn't so much if supermarkets are offering them, but how many and for which items.

Relative to years past, however, deals on food and beverages are few and far between, and an underperforming supply chain is part of the reason why.

During the penultimate quarter of 2019, approximately one-quarter (25.7%) of the items sold by grocers nationwide, on average, were on sale. Three years later during the same three-month period, it's down to just 20.6%, The Wall Street Journal reported from data collected by Information Resources Inc.

The cause of the discount decline is multifaceted. Some of it is attributable to inflation. With wholesale prices at decade-long highs, as evidenced by the Producer Price Index, retailers have less price flexibility since they're spending more for items in order to turn a profit. In August, for example, the PPI for processed goods for intermediate demand rose 14.1% compared to 12 months earlier, according to the Department of Labor's latest estimates.

But it's also due to grocers not having enough merchandise in the pipeline to accommodate price cuts.

Kosta Drosos, general manger of Fresh Market Place based in in Chicago, told the Journal that he hasn't advertised discounts on dairy products for close to five months. The same goes for many other grocery items, from soup ingredients to traditional sandwich condiments.

"It's hard to run anything on promo," Drosos said.

Many budget-minded shoppers are struggling to find discounts on grocery items.Many budget-minded shoppers are struggling to find discounts on grocery items.

Demand remains elevated
Exacerbating limited supply is robust demand. Typically when consumer prices rise, demand tends to pull back — sometimes slightly, on other occasions substantially. Although families say that inflation is a concern for them, over 85% of respondents in a survey done by the Food Industry Association say their food spending is under control.

Fewer discounts, however, are making it more difficult to find bargains. As a result, a number of shoppers are changing up their buying behaviors. For example, 23% of respondents in the Food Industry Association poll said they're starting to purchase more items in bulk.

It's also influencing the kinds of foods grocery shoppers select for their meal planning. This includes Tennessee resident John Frey. A retiree living in Kingsport, Frey told the Journal he's spending more time focusing on how prepare lunches and dinners on a budget. He's also starting to freeze a number of foods so that they last longer while preserving freshness.

"It has changed the way I cook and prep," Frey explained.

Despite fewer doorbuster deals and rapid inflation consumers are in good spirits overall. The Consumer Confidence Index in September reached 108, The Conference Board reported. That's up from 103.6 in August. Additionally, over 18% of respondents said they expect they'll be earning more money in the coming months, which is up from 16.6% in August.

It isn't just costing families more money to put food on the kitchen table; it's costing restaurants more money to prepare meals for their guests. As a result of how much they're spending and a temperamental supply chain, a substantial portion of eateries are downsizing their menu offerings.

Close to one-third of restaurant owners say they're offering fewer dishes to their dine-in and take-out customers, according to a newly released poll conducted by Toast. Querying more than 900 restaurant decision makers, the wide-ranging survey covered many of the challenges dining establishments have encountered over the past several years, from staff shortages to supply chain disruptions to the effects of inflation on their bottom lines. Of all the adversities restaurants have encountered, inflation appears to have inspired the most corrective measures. For example, in addition to 31% who admit to streamlining their menus, 39% acknowledged they're now keeping track of prices for ingredients they use frequently, or that are important to specific dishes. Around 38% said they've also changed how many suppliers they're using because of supply chain inconsistencies.

Ingredient shortages have affected major food processors as well, particularly staple crops like potatoes, which are commonly used in items like cereal, chips, crackers and for frying purposes. After an underwhelming season for potato production, Lamb Weston says it's been successfully using pea starch in lieu of potatoes since it is similar in consistency to potatoes when used for cooking. It's had the added benefit of also helping the Boise, Idaho-based potato processor reduce food waste as well as food costs.

Leveraging more affordable ingredients is another way restaurateurs are pinching pennies. The Toast poll revealed around 30% of respondents have substituted some of their traditional ingredients for those that cost less.

Nearly 1 in 3 restaurants say they're offering fewer dishes due to persistently high food costs.Nearly 1 in 3 restaurants say they're offering fewer dishes due to persistently high food costs.

Other compelling reasons for smaller menus
Even before food costs became a pervasive issue, an increasing number of restaurants were opting to reduce how many dishes their customers had to choose from for ordering. Advocates of this approach say it make sense not only from a business perspective, by reducing food waste and the cost of food, but from a customer satisfaction perspective as well. Since restaurant diners can often find it difficult to narrow down which dish they want, right-sizing the menu and focusing on improving the quality of a select number of dishes can make the dining experience more enjoyable.  

Generally speaking, business costs for restaurants break into three categories: labor, food and overhead. As with other industries, virtually all of their expenses have swelled due to inflation, but this is true for food in particular. While restaurants have been forced to raise what they charge, it hasn't been at a rate that's consistent with how much extra they're spending. Indeed, according to the National Restaurant Association, wholesale food prices are up more than 16% over the past year as of August. Menu prices, meanwhile, are up 7.6% over that same period.

National Restaurant Association CEO Michello Korsmo pointed out that dining establishments have had to cut back in other ways as a result, such as by reducing their menu options or closing earlier than they normally do.

Ford, GM ramping up EV production efforts

With prices at the pump still elevated and winter bearing down, an increasing number of Americans are seriously thinking about purchasing an all-electric vehicle. The federal government is incentivizing drivers to do so as well through rebates and tax credits, something that over two-thirds of adults around the country support, according to a recent survey conducted by the Pew Research Center.

The problem? Several of the materials and resources that EV needs to operate — like rare earth minerals, which are used for the manufacturing of batteries — are in short supply domestically.

However, two of America's "Big Three" automakers are making major investments in the infrastructure that will enable them to produce EVs at a rate that keeps up with demand.

In a press release issued Sept. 23, Ford Motor Company announced that the wheels are in motion toward developing a massive electric vehicle warehouse in the Volunteer State. Located in Stanton, Tennessee, the auto manufacturing complex is expected to cost Ford more than $5 billion to build when all is said and done and will span more than six square miles.

Eric Grubb, director of new footprint construction for Ford, said the facility is just what the company needs to start pumping out EVs at a higher volume.

"We are building the future right here in West Tennessee," Grubb explained. "This facility is the blueprint for Ford's future manufacturing facilities and will enable Ford to help lead America's shift to electric vehicles."

Historically, EVs have waxed and waned over the years, representing the vast minority compared to gas powered vehicles. Automakers anticipate a role reversal, however, with BMW forecasting EV sales to surge 70% in 2023, according to Bloomberg.

Electric vehicles are expected to overtake gas-powered in road presence. Electric vehicles are expected to overtake gas-powered in road presence.

Ford expects a similar shift and is targeting a global EV production run rate of 2 million within five years, the company said.

Ford isn't the only domestic nameplate that's doubling down on EVs being the wave of the future. Fellow Big Three automaker General Motors formally announced its partnership with Lithion Recycling, a Canada-based energy firm that specializes in lithium processing. Lithium is a rare earth mineral that is used for making EV batteries, specifically lithium-ion batteries.

Jeff Morrison, vice president of global purchasing and supply chain at GM, stated in a press release that General Motors hopes to be part of the solution when it comes to addressing climate change.

"GM is aggressively scaling battery cell and EV production in North America to reach our target of more than 1 million units of annual capacity by 2025, and we plan to eliminate tailpipe emissions from all our new light-duty vehicles by 2035 – so we are building a supply chain and recycling strategy that can grow with us," Morrison said.

With Lithion poised to open its first commercial recycling operation as soon as next year, GM expects to be able to produce as many as 7,500 metric tons of lithium-ion batteries annually.

Among those Americans that are casually or seriously considering purchasing an EV, 71% of respondents said saving money on gas was a primary motivator, according to the Pew poll.

5 tips to minimize retail shrinkage

Every sector has its inherent challenges, and for retailers, a major one is shrinkage. Caused by a variety of factors that prevent stores from selling their merchandise — such as employee theft, return activity, shoplifting and more — shrinkage costs retailers a combined $94.5 billion in 2021 alone, according to the National Retail Federation.

In addition to adversely affecting the industry's profitability, shrinkage also compromises the overall supply chain, leading to instability in product availability and higher costs both for companies as well as for consumers.

To a certain extent, shrinkage is inevitable, but there are some things you can do to reduce its prevalence. Here are a few suggestions that can be effective:

1. Offer store credit
The vast majority of customers who need to return an item do so for legitimate purposes, such as clothing that doesn't fit or is defective. But with return fraud becoming more common place, you may need to be more selective with regard to money back guarantees. Thus, you may want to consider offering store credit for items being returned in lieu of full refunds. This way, the money a customer paid for merchandise remains with the company.

2. Be more mindful about labels
With a quick tug, snip or snap, pricing and branding labels can be easily removable, which make clothing, shoes, handbags and other merchandise seamless to steal with nothing for the security system to flag. You may want to consider placing more heavy-duty RFID tags on merchandise. Not only are they difficult to remove, but these tags have sensors that are identifiable for security systems to detect should a shoplifter attempt to steal an item that has one attached.

It sounds too simple to work, but checking receipts can be an effective deterrent to shoplifting.It sounds too simple to work, but checking receipts can be an effective deterrent to shoplifting.

3. Check receipts
Virtually every paying customer departs the store with something different but one thing they should all have is a paper receipt. Consider placing one or several store greeters at the entrances and exits of the store. Depending on how big of a problem theft is for your location, a store greeter can serve as your last line of defense to shoplifting by their corroborating whether customers  paid for their purchases.

4. Install surveillance cameras
Strategically placing security cameras around your facility can both detect shoplifting activity and serve as a deterrent. If people know that they're being watched, they'll likely be less inclined to take something if there's proof catching them in the act.

5. Create incentives for employees
Just as shrinkage is a multifaceted problem — caused by everything from misplacing items during shipment to mishandling during receiving, leading to breakage — it requires a multifaceted solution. One part of that fix is by equipping your employees with some shrinkage reduction best practices. In addition to providing them with tips, make it worth their while through employee incentives. Set a shrinkage reduction goal for your company or for each employee. Achieving that goal is something to worth celebrating and inspires your staff to be extra diligent.

Crime biggest contributor to retail shrink, report finds

For retailers, inventory shrinkage is an unavoidable reality. Whether it's caused by products containing defects, items getting lost or misplaced during shipping or a variety of other scenarios, when merchandise isn't available for purchase, it's chalked up to shrinkage. Another shrinkage contributor is theft, and based on a newly released report, it's a multi-billion dollar problem across the country.

In 2021, the most recent year in which data is available, shrink cost retailers a combined $94 billion, according to estimates from the National Retail Federation. That's up from approximately $90 billion in 2020.

Retail shrinkage is an umbrella term that encompasses several potential causes, such as damaged goods and employee theft, among others. But the biggest contributor to shrink last year came from customers brazenly stealing goods.

Mark Mathews, vice president for research development and analysis at the National Retail Federation, said organized retail crime is quite rampant and seems to have coincided with the pandemic.

"The factors contributing to retail shrink have multiplied in recent years, and ORC is a burgeoning threat within the retail industry," Mathews said in a press release. "These highly sophisticated criminal rings jeopardize employee and customer safety and disrupt store operations."

Shoplifting skyrocketed in 2021 for retailers and is prompting a response to get it under control.Shoplifting skyrocketed in 2021 for retailers and is prompting a response to get it under control.

Shoplifting soared 73% in 2021
Across just about every purchasing channel — in-store, online and mobile device — retail fraud grew in prevalence, the report found. Shoplifting, for example, rose 73% in 2021 compared to a year earlier and instances of violent crime surged more than 89% year over year.

Retail crime has been so rampant that in several cities — such as Los Angeles, Chicago and San Francisco — some stores have had to close several of their locations. As ABC News affiliate KGO-TV reported earlier this year, two Walgreens stores, located in the downtown portion of San Francisco, shut down last November due to heavy shoplifting and organized retail crime activity. Some people have attributed the spike in property crime in California to lawmakers decriminalizing retail theft up to $950. This means stealing merchandise valued below this figure is considered a misdemeanor in the Golden State, rather than its prior status as a felony. Prosecutors aren't obligated to issue charges for misdemeanors. Los Angeles and San Francisco were Nos. 1 and 2, respectively, in organized crime activity in 2021.

Aside from the substantial financial threat shoplifting poses to retailers, it also risks employees' physical safety. For this reason, store operators are shoring up their defensive posture. The report found nearly 45% of employers have increased their spending on loss prevention solutions and over 60% are spending more on technology, such as anti-theft equipment and other tech-enabled assets designed to curb retail crime.

Cory Lowe, senior research scientist for the Loss Prevention Research Council, said retailers must go to every length and spare no expense to ensure their workers are protected from harm.

But store operators also need help from local, state and federal official for things to improve. Retailers in the poll were nearly unanimous in their desire for better enforcement from police and stiffer penalties for those breaking the law.

Whether it's dining at traditional eat-in restaurants or buying groceries at the supermarket for home cooked meal preparation, food prices are taking a real bite out of Americans' wallets. In August alone, the cost of food was up 11.4% from the same period in 2021, according to the Department of Labor. And when taking into account solely the food that people purchased at grocery locations, prices were up more than 13% year over year. Understandably, families have a legitimate beef with what they're being forced to spend just to put breakfast, lunch and dinner on the table.

But in a rare bit of good news, the rate at which prices are rising for beef appears to be slowing down, suggesting to some that consumer inflation may have reached its peak.

During August, the average price for meat on a per pound basis was $4.65, Grocery Dive reported from data released by IRI and 210 Analytics. While this average was 7.6% higher year over year when contrasted with August 2021, it's substantially lower than the rising cost of food overall (11.4%).

Typically meat is among the most expensive food items that families purchase, although costs can vary considerably depending on the type of meat as well as the cut. For most of 2022, however, price fluctuation for meat has been fairly minimal, rising just 0.4% in the in the 12 months to August for 1 pound of fresh meat. It climbed only 0.2% for a pound of fresh pork, Grocery Dive reported.

More people are buying their meat from local cattle farms and ranches.More people are buying their meat from local cattle farms and ranches.

More families buying beef wholesale
One of the ways consumers are saving on beef is by buying in bulk. Jess Peterson, who serves as senior policy adviser for the trade group U.S. Cattlemen's Association, told The Washington Post that many of his clients raising cattle increasingly deal with buyers who would traditionally get their meat from their grocer. Buying wholesale allows them to save.

"With prices getting higher at the meat counter, there's definitely been more direct interest from consumers," Peterson told the newspaper. "Our price points are still less than what someone would pay at the store."

While bulk buying is up with meat producers, it remains lower than where it was during COVID. Kansas State University Agricultural Economics Professor Glynn Tonsor told The Washington Post that fears of massive food shortages throughout the pandemic spurred families to buy prodigious amounts of meat, freezing most of it for later use.

Prices for other kinds of meat, however, are skyrocketing. The average cost for a pound of poultry (chicken and turkey) in August was 18% higher than what it cost 12 months ago, Grocery Dive reported. In addition to growth in demand for chicken and poultry, flocks across the country have been decimated by bird flu. Chicken farmers in several states over the past year were forced to kill tens of thousands of chickens due the virus affecting their birds. Already limited supply has pushed prices to near all-time highs.

Small-business owners throughout the U.S. are experiencing some cognitive dissonance of late, perhaps a lingering hangover of the pandemic. On the one hand, customer traffic is up considerably, evidenced by higher revenues and a slowly improving supply chain.

But at the same time, these very companies are not doing as well financially compared to a year ago, according to new data.

Over the past year (July 2021-July 2022), revenues for small-business owners have jumped nearly 90%. During this same period, though, their earnings fell by 4%. These are the findings of a special report issued by Kabbage from American Express, a collaborative effort led by the credit card issuer.

As with households throughout the U.S., small-business owners are struggling with the effects of massive inflation. Over the past two years, the costs of goods and services have risen sharply for just about everything, including gasoline, food, raw materials and electronics. Spending more and getting less is taking a toll on Americans, with a majority of people in the country— 56% — saying inflation is causing them some degree of economic hardship, according to a recent poll conducted by Gallup. That's up from 49% who attested to this back in January when a similar survey was performed.

Inflation leading problem for nearly 1 in 3 small businesses
Small-business owners are also struggling. Indeed, approximately 30% of respondents to a survey by the National Federation of Independent Business said inflation was having more of an impact on their company than any other variable, more than unfilled positions or the supply chain.

Brett Sussman, vice president head of sales and marketing for Kabbage from American Express, noted getting ahead at this point is not small-business owners' focus. Right now, it's all about holding on.

"U.S. small businesses are adjusting to not only survive but flourish during challenging economic times," Sussman said in a press release. 

Small-business owners' profits are down 4% from last year as of July.Small-business owners' profits are down 4% from last year as of July.

Much like the Consumer Price Index, a consumer-based measure of inflationary pressures, the Producer Price Index is on a seemingly perpetual ascent. Measuring what wholesalers charge, the cost of goods in August was over 12% more than a year ago, according to the Department of Labor. Business owners are also spent more on services, but to a lesser extent (6%).

Bill Dunkelberg, chief economist for the NFIB, said this is a particularly challenging period for just about everyone. Business are enduring one obstacle after another, which is making even progress a tough slog.

"Owners are managing the rising costs of utilities, fuel, labor, supplies, materials, rent and inventory to protect their earnings," Dunkelberg said. "The worker shortage is impacting small business productivity as owners raise compensation to attract better workers."

Meanwhile the Federal Reserve is taking more aggressive measures to get inflation under control by raising interest rates. The theory is doing so will help to tamp down demand, but some fear that this could cause the economy to slip into a lengthy recession, or one that's more stinging than the current one.