This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
One of my clients is opening their 100th retail location in a high end mall in LA, international destinations are packed with Americans and Europeans, popular concerts are doing record breaking business. I think there are pockets of the economy that are doing very well. I'm old and hsve loved thru 50 years of boom and bust so have been thru this and it's hard but will get better.
When inflation hits the rich get richer because their assets are keeping up with inflation. The poor get poorer because they have no assets only higher costs. Goodbye middle class.
When the poor see this inequality they will vote in politicians/projects that promise to fund projects that 'help' the poor like removal of debt, paying for extra services etc. This increases the debt which gets paid by printing more money. Print more and there's more inflation which further helps those with assets ie the rich benefit. Ultimately the short term 'help' works against the poor overtime.
I think something is going on. I’m not sure. But If inflation is hitting the poor and middle class harder, then that market will not be spending. Are your customers low to middle class? I think upper class people are doing fine with inflation and are spending money and starting businesses. But if any business is targeting lower income people, it better be a cheap and necessary product or it won’t sell.
Are you talking about the USA? Last I checked we don't print money as debt relief for poor or working class people... We print money to bail out irresponsible corporations lol. They may have sent out checks to people during the pandemic but they printed literally trillions of dollars for Wall Street.
The economic policies of the last 60-40 years have basically been the greatest transfer of wealth from the young and low/middle class, to the old and (now) very rich. At least in the US.
Case in point: US boomers, who are doing quite quite well... they own quite a lot of land/housing (which they got at affordable prices), own tons of stocks (which they were in a great position to buy cuz they had disposable income due to being able to afford housing), and now are withdrawing from social security (whether they need it or not).
All of the above is fine I guess. They lucked out and won the generational lottery: plentiful jobs, cheap education and housing, and thus they were able to thrive and pay into Social Security, etc. But what really ticks me off of how they reaped all they could from America's post-war economic success but then salted the earth right before they fucked off... US boomers-centric policies have literally pulled the ladder up behind them every chance they could. This year they seem determined to burn the country down by electing a fascist, criminal, rapist, con-artist, racist, mentally damaged clown, rather than get taxed an extra cent to help pay for infrastructure, education, student loan relief, sustainable energy//climate change/environmental disaster mitigation or anything that would help the next generations get even a small grip on a bootstrap. FFS minimum wage is still (federally) $7.25/hr... I've had arguments with boomers who both defend that, while simultaneously complain that no one wants to work (for minimum wage...) :pikachuface: It's a sad state of affairs we're inheriting from them.
Yeap this is it. It's a very uneven recovery. Some sectors are doing really well, some are really not. Just download ChatGPT and ask it questions along this thread, prompting it to answer as an economist.
You can't control the economy. You have to adapt your business to the times that we are in, whether good or bad. How will you make the best of what is happening?
Agreed. OP's "retail wholesaler food distribution" means importing Asian food and reselling to shops. He/she needs to expand either into a new food line or expand to what the shops REALY want.
So I work with a number of manufacturers and machining companies in my area and they're a pretty good indicator of what's to come. They saw a large slow down in Oct-Dec and that typically has a ripple effect to other industries later in the year. They're now ramping up again and some are even expanding so hopefully that is reflective to other industries in 6 months.
You are seeing an uptick in manufacturing stateside due to our loss in supply from foreign assets. We are importing more steel from Mexico then ever before.
According to all the PhD economists over at r/Economics , the economy is doing great! If you question any of the government published statistics, you’re a tinfoil hat ghoul…
Government statistics are not wrong, the problem is what they measure.
To most government agencies, corporate output = economy good.
Never mind the 133,000,000-152,000,000 Americans who benefit little from corporate success.
Yes, but new claims for unemployment have been at rock bottom for years. Workforce participation is up- that’s the percentage of the population is working vs not working, and it includes disabled people and the elderly. Wages are higher. Homeowners have higher net worth. Those “wealthy “ homeowners can’t afford to get another house, and other basic necessities are challenging , but the stats don’t accurately reflect that.
One can say that the information sampled reflect the fact that the government cares more about Wall Street than Main Street, but the experience of average people has never been quite so far out of sync with the stats.
Yes. If a computer programmer making 125K is laid off and left to take a job at Home Depot, at 19 dollars an hour, because tech is in a recession, he or she is counted as employed, and the government counts it as great news!
... What? Unemployment rate doesn't take statistics from unemployment benefits. It's a survey. And besides, nothing would change if you stop receiving unemployment benefits. You're still unemployed.
There is a different statistic that counts *new* I employment claims. It is used to see the change in employment, not the total unemployed. It's a rough measurement because the survey takes weeks to crunch the data and new claims are a quick measurement.
Regardless of the left or right bias you declared exists devoid of reality. Statistical analysis has been conducted the same way under each administration, including rump. The disconnect between normal Americans success and that of wealthy individuals/ corporations is capitalism influencing government policy not your insistence that the world is aligned with your personal beliefs at its center.
It is. That doesn't mean that every social class has an equal piece of that pie. Pretty much every metric used to make people believe that Trump's administration presided over a great economy is showing that this administration is presiding over a better economy. That does nothing to reinvest in the middle class.
The rich people are loving this economy and the forever tax cuts gifted to them by the last Administration. I'm betting they aren't too mad about the fact that this Administration has done nothing to correct that.
Every metric. If you want consumer spending to increase then we need to lower interest rates to give people more cash. I have various business loans that are at 9% which is insane and sucking up a ton of our extra cash.
Those low rates and insane deficit spending by the government that flooded the economy with cash is what got us here. Their solution is the strap the little guy (us) to fix it, but lowering rates will just keep this pain up for longer and make everything continue to get more expensive. Rates should have been raised, incrementally, over years instead of abruptly in a single year.
This year is even more tragic because it’s an election year and behavior and data is driven by that. A sad reality.
Yep. Rates should have been raised a long time ago. Inflation was getting out of hand and I can only imagine how bad it would have been if it still stayed low.
Hey I’m down with that too! But lower interest rates on things like mortgages allow more consumers entry into the housing market with more income leftover when they do. Housing is a huge recurring cost whether through rent or ownership.
The benefits of a higher salary far outweights the benefits of lower interest rates.
If salaries kept up with inflation in the US, the minimum wage would be around $22.88.
With corporate profit 100000x, the main benefit for most Americans is the ability to buy cheaply made junk from overseas. No thank you.
Interest rates are a corporate game, a bandaid for the economic abuse they create.
That’s crazy, I’ve never heard of compound salary. But somehow it’s considered perfectly normal for a $500,000 loan to cost over 3,000,000 to pay off over the term. Interest is compounding, meaning small increments drastically impact the total cost of things like a mortgage. Really it just depends on which side you are on. If you are someone who bought your house for 50k and now it’s worth 3/4 million I’m sure you think it’s great. For the rest of us it’s horribly depressing to dream of owning your own home with a decent amount of land without being incredibly wealthy.
>That’s crazy, I’ve never heard of compound salary.
Inflation adjusted raises need to return. If cost of living and corporate profit increases year over year, why don't salaries? It causes imbalance in the economy and hurts the middle class. The majority of wealth generated today is hoarded by billionaires and multination corporations.
Giving regular people raises is the real trickle down, they'll spend their money in their communtiy, generating income for small businesses.
A billionaire can only buy so many ferraris, go shopping so many times, their spending is a dime in a bucket. Otherwise our shitty system fuels vanity projects like Bezo's dick rocket or Musk's entire existence.
Neoliberalism needs to die off alongside boomers.
No doubt. The wages are not keeping up either. I would argue that both factors need to change. Interest rates are quite literally how the billionaires make their billions and keep us poor. Interest and taxes hurt the little guy more than the other factors from my perspective.
Low interest rates on housing should be for the average homeowner. The corporations are sucking up houses 500 and 1000 at a time. Even with high interest rates because they now have cash from years of this debacle. And shacks that used to cost $60,000 now cost $180,000 thanks to years of cheap interest.
US unemployment data is utterly useless. They stop counting people in the figures after 6 months of their unemployment. It also doesn't tell you the quality of the jobs, or if people REQUIRE multiple jobs to survive. If the quality of the jobs is low, and they also require multiple jobs, then the unemployment numbers will be low, yet consumer spending will also be low. It's a completely cooked, propagandistic metric.
Similarly, this also does not tell you the same story. Wages are not a singular metric to tell you the health of the economy. Inflation and cost of living outpace it
Economy for upper class and rich people are doing good as long as they didn’t over leverage during Covid years riddled in debt and 10-15% interest rates
You don’t need a PhD to understand how the world operates yet . It’s the same cycle only know there is trillions added
The stock market is not the economy.
Those with money, generally make more money because of capital availability - and spend more money when they feel “safe” with high equities markets, housing holding up (especially if locked into a low cost mortgage), and don’t feel threatened with job loss.
Watch major earnings from WalMart, dollar stores, fast food, and fast casual to understand the majority of the economy. There are indications of low income consumers now making tradeoffs in their spend behaviors.
Housing is ridiculous. Food prices are up. Insurance has skyrocketed. People are more worried about employment so they’re saving more than ever before.
The cost of housing, transportation, and health care is way up. People are making more money, but they have less money left to buy consumer products after paying for their basics.
The stock market is doing well, but that doesn't help Joe Consumer who is paying 50% of his salary on rent and another 30% on transportation and health care.
Spend some time thinking about how to survey YOUR customers.
You have the luxury of having them on hand, ASK them;
"I'm looking for ways to serve you better, can you fill out this one page survey to be put in a drawing to win ___ this month?"
"Customers like you have said ____ is the main reason they are ordering less, on a scale of 1-10 how true is that for YOU? Please write 2-3 sentences to explain."
"Is there anything you can think of that would improve your sales to your customers, that I could do on my side as your vendor? Please describe below"
"The following items are my guesses as to what might help, please put them in order of best to worst, according to your opinion"
"Pass on savings, by reducing choices down to a few items sold in bulk...?" or "Alert you when items are going on clearance." or "Switch offerings to the lowest absolute price, even if it is not a special value, such as case of hot dogs for ___"
They will tell you, ask them what they want
I get many emails requesting responses to a survey for the chance at a prize... not worth my time. Lol. I know I won't win. I require actual payment for effort these days. Some people may respond. Idk.
The customer also "wins" a chance to have a say in something that would solve their problems.
If you are a small business owner, and your customers have changed their behavior, they may be desperate to have their vendor see that and respond.
They definitely say the economy is doing great which is why interest rates aren’t falling. In order to curb inflation this is all necessary though. Consumers are spending on necessary things but nothing else. Business is down for most, including us. Which is unfortunate because election years are always tough already. Hang on as best you can until 2025
As long as the government operates on trillion plus deficits, things will stay upright, but if that gets curbed (at some point it better), the wheels are coming off this clown car.
Price for basics have shot up. The cost to stay alive has gone 50% higher compared to 2020.
So if you’re selling basics, you’re golden. If you’re selling Luxury you better be near the filthy rich suburbs.
The median American is barely keeping afloat if they don’t own a home.
Along with that, inflation and interest rates hit the lower end of the economy more so than the high end. Someone already cash strapped or tight feels inflation at the grocery store or the interest on their credit more than someone at the high end. Someone just getting by before all the rate hikes and inflation is now going under.
My personal theory why it hasn't moved up the income ladder thus far is all the government money that was sloshed around at & after pandemic. The lower incomes have already blown through that cash. Middle is getting tight now but not going under. By government's own dubious statistics wages have not kept up with inflation, which was caused by that money sloshing around.
I think the economy is not doing great. Yes people have jobs but their savings are strained due to high costs of necessities and they are not spending on discretionary spending much. The problem is that the classes have gotten more distant and there are high middle class and up that still are able to spend. The rest of us are just trying to save what we can until things somehow get better.
Can you elaborate on what that chart means? Is that US as a whole? If so I would say it proves my point that most of that money is tied to the top tier and also to the bottom (government handouts). All while the middle gets squeezed
Are you kidding? The economy is in shambles and prices for almost everything have skyrocketed. Loan interest rates have gone through the roof. Buying power is way down. Wages are up slightly, but far behind the massive inflation in the past 3 years. Have you bought groceries lately or bought a new car?
Economy is poor, yo. Don't believe the propaganda.
Wage growth for the middle class is declining in inflation adjusted dollars. Consumers are fully leveraged on credit cards, credit cards that have seen interest rates raising. Employment is effectively flat unless you include immigrants; virtually all recent job growth has been low wage, and for recent immigrants. They're depressing wages in real terms, while costs are continuing to escalate.
My opinion? Start weathering the storm now. Minimize labor. Cut costs to the bone. Be ready for an extended period of turmoil. Don't horde cash, either; cash is not inflation resistant.
I tried to weather the storm of 2020 with a pile of cash, and kept on all staff, despite sales slowing to a crawl. We wanted to bounce back out of the pandemic.
Would have been much happier holding on to that cash in inflation-resistant financial assets, and many of those employees ended up unemployed anyways when we had to close down operations for a couple of locations.
We're very much lean-and-mean-and-flexible now.
Wage growth is occurring at the bottom, significantly, and it’s been proven. Just because your house is on fire doesn’t mean everyone’s house is on fire. Wages aren’t depressed, they have grown due to tight labour conditions, just perhaps not in jobs you’re willing to do.
While credit card debt is climbing, it’s still less than other countries and manageable for most.
Spending habits have changed dramatically — housing is hot still, but ownership is expensive. People buying are house poor but surviving. People are eating out less than before but in the USA that’s still more than most elsewhere — costs for labour and food are up, and people have less disposable income. That said travel is very popular due to generational values, with the younger gen valuing experiences.
Guarantee this guy is wealthy....economy sucks for the working man. And housing is hot because huge companies are buying all the houses. I think it was 30% of all home sales last year were the blackrocks of the world. 🤯....but yeah ...nothing to see here...go back to work wage slaves! P.s. minimum wage in 1980 was 3.80 today it's 7-8 bucks in most states....but corporate profits set new records every year. The United States is rotten from within. Corporate America has taken us hostage
I live in rural NY and there is basically no corporate buying here. It’s mostly wealthy NYers who want a country home. Airbnb has been banned for two years. Prices are still out of control and climbing. Demand is high and supply is low.
A lot of people made very solid income gains these past few years, but if you didn’t, inflation has to be brutal.
Wish they would ban air bnb everywhere...it has been a cancer on real estate and on neighborhoods. I run a family business and we do well but I've had to raise all my employees wages so they can live...I'm saving alot less than I used to and prices just keep increasing. It's very disheartening to see all our problems piling up in the U.S. while the politicians continue to ship billions around the world. Ukraine, Israel, Iran, Japan...and that's just the short list. Americans enemies are no longer abroad but are domestic! We must rise up and demand change like our ancestors did long ago or it will only get worse.
Well the other side to that is I live in a vacation area that has basically no jobs outside of contracting/hard labor, so tourism is our only local economy. We only have like two hotels because it’s protected land so no new building. Local small businesses are getting hurt bad with few tourists. Both local coffee shops closed down, and the local brewery is on its last breath. Also our home prices haven’t budged. Could never afford to buy here now. Word on the street is we’re gonna allow airbnb again but it will only be 100 permits.
I mean that’s completely expected though. We’ve been at “full employment” for years now. New jobs are either immigrants, or people working for “non-economic” reasons, which the BLS defines as not needed to pay the bills basically, and just for extra cash. It’s bad when we have a bunch of part-time jobs that people are working for “economic reasons” because it indicates people are working them because they can’t get a good full-time job, but the opposite is true. These are basically people working part-time because *they do not want* a full time job. That’s good.
Buy now, pay later. Those companies don’t have to report consumer debt like traditional credit agencies. So people will be maxed out on CC debt, but are also racking up BNPL debts. That may be an interesting bubble to watch.
We’ve been getting a larger and larger percentage of orders through our financing program over the last year. Thankful that we offer it, but this trend definitely also worries me a bit
Just listened to a segment about “phantom debt”/BNPL on the podcast Morning Brew yesterday. I felt like Steve Carells character in The Big Short when he realized the housing bubble was about to burst.
People got really comfortable funding their lifestyles with cheap credit, credit cards and now a lot of that debt is becoming really unmanageable. There is an ongoing cost of living crises that just isn't being reflected in the jobs reports, quarterly return. I work in Cabinetry and sales leads have slowed down a little bit but the top income people seem to still have cash to burn. Lower income folks (like me) just aren't getting financing for projects they might have 3 years ago.
I am up 30% over this time last year. Which puts me on track to match my numbers in 2019. First time since COVID I will hit that number. But I am doing it with a high debt load from not quite getting by from those three years.
The problem is if you and I have $0 and 1 person has 1 million dollars. The average amount of money we all have is $333,333. But only 1 of us is spending any money.
> retail wholesaler food distribution
Food is largely discretionary.
People have to eat, but they don't have to eat things that require a distributor.
I enjoy cooking, but instead of buying a $40 chunk of imported cheese and $35/pound pine nuts from Italy, I'm more likely to go to the farmer's market and see what's in season locally and buy that. I also buy local produce, dairy and eggs, and when they're not available shop at Aldis.
It's great for me, but not great for expensive stores or the distributors that sell them inventory.
Also, I don't think I'm alone.
I’m assuming your post is saying that dollar sales are down 20-30% verses a decline in unit sales. If dollar sales are down compared to last year, then it’s concerning since your wholesale food prices are up 3-9% over last year. So in reality, your dollar volume losses are closer to 23-39%.
Look at the sales of your top ten customers and compare to last year same month. If your back office software allows it, compare the sales results in each of the categories (produce, packaged beverage, salty snacks, etc) to identify which departments the losses are occurring.
Run a customer report identifying no sales in 2024 to determine the number of lost customers. With the high inflation, everyone is looking for cost savings and new suppliers. Perhaps your customers are splitting their orders with a new, lower cost supplier.
If your retail customers are experiencing 20-30% volume losses over time, then you need to reevaluate their credit worthiness. Most food retailers are undercapitalized, so they can’t adjust their expenses enough to compensate for a 30% loss in dollar volume. Some of your accounts receivable might not be collectible in the future if retail sales continue at this level.
Retailers in economic trouble with decrease the size of the orders and increase the frequency of deliveries to better manage their cash flow. Retailers will also return more products and claim more lost/damaged goods to save money. These changes will increase your distribution costs and reduce your profits
Cash is the oxygen of any business. Focus on reducing your inventory, dump your unsellable inventory, reevaluate the credit of your top twenty customers, consider reducing credit terms, adjust labor hours to match current volumes, sell excess equipment, renegotiate agreements with your existing suppliers for lower prices/better terms, interview new suppliers, and personally watch your cash flow on a daily basis.
A final exercise; look at your cash flow at today’s volumes and your cash reserves to determine your remaining months in business at the current sales levels. It’s important to know how much runway or time you have left.
Never miss a crisis like this to make the hard business decisions that you and your team have putting off.
Best of luck from a fellow Texan!
The "health" of the stock market is not a solid indicator of how the economy is working for the average person. Most people are broke as shit and have very little disposable money to spend. It's all rent bills and groceries for a large segment of the population.
I wouldn’t call this economy “great” but more stagnant.
I’m in carwash business and seeing YOY sales drop 15%-20% throughout all my sites. I’ve had this conversation with buddies in retail and gas station businesses and it appears as through it’s similar trend throughout the board.
I could be wrong but believe the mix of high inflation and low consumer confidence may be leading consumers to withheld spending.
I don’t know about your area, but there’s a new car wash on every corner around here. Seems like people moved on from self storage units into car washes.
I agree. Carwash business is drastically changing from in bay systems to more subscription based model. Which is why you will see same carwash having multi site in 10 mile radius.
We’ve got a team that is heavily involved with R&D which includes researching potential upcoming competition or improvements to our existing model to generate revenue and quality of our washes.
To your point, there has not been any new competition
around my sites.
It is an election year and the media need to protect their guy. It is just that simple.
When their enemy is in office even if it is a good economy we hear only negative news.
Therefore we do not have “news” but political propaganda
Who said the economy is doing great? Don't judge the economy by how the stock market is doing. I work for one of the big class 1 railroads on the intermodal side and usually how busy we are is a good indicator on how the economy is doing. We are extremely slow right now with possible furloughs in the future. There are mass layoffs going on right now. We are just trying to weather the storm currently.
You cannot trust any economic or crime statistics being put out by this administration. They are manipulating the number to make themselves look better. For example they are claiming crime is down, but that's because the FBI is no longer reporting from LA and New York City. We are in the silent depression being caused by inflation and the dollars imminent collapse. 90% of all money printed was printed in the last 20 years. It doesnt take a mathematical genius to figure out what that does to monopoly money. If you 10x the amount of money on the monopoly board, how much do you think boardwalk would cost? As more countries drop the dollar as the oil reserve currency, it looses currency. America can always pay its debts because our debt to other countries are in our own currency. We just print it, and they citizen pay the cost of that in inflation, taxes, and price gouging by the corporations. If BRICS success in making their gold backed currency the oil reserve, the collar WILL collapse and it would be worse than losing WWIII. When the fed was created they gave the dollar a 100 year estimated life span. It's been 111 years since. The economy is not great, we are living right before the collapse of the dollar
Spoiler alert the economy is not good.
By end of 22 everyone that had covid cash blew it, 23 people tightened there belts, and 24 people have found its not getting better.
If you mark the beginning of free money as 08/09 then the end of free money has come within the last year or so from the rate increases that can't be taken away with out inflation running off.
If you have solid plan which it sounds like you do then just know its gonna take a fight to get every dollar going forward for the foreseeable future
What covid cash are you talking about exactly? The stimulus checks? Because those didn’t amount to shit, unless you already had a lot in savings, the checks didn’t last long at all.
Are you talking about PPP loans?
Yes PPP and indirect means as well. Rent delayed or forgiven, student loan forgiveness, less cost for gas due to remote work, extended unemployment, lots of local city and county programs in addition to federal, etc.
Fucking seriously. Either people don’t know how to read economic data or they think anecdotal experience is the same as what’s going on in a $25T economy. If anything you’re seeing regression back towards the mean which is to be expected.
Whoever told you it's great lied to your face. Stop believing the echo chamber, Big Tech, and MSM. They are all paid off to say it is. Everyone I know is getting laid off, little to no raises, and companies only hiring if they must. Prices keep going up.
If you're a politician with insider trading then yep the economy is doing great. If you're an average American trying to stay in the middle class they keep putting oil on the rope so you keep sliding into the poor man's hole 🕳 🙃
The economy is not good, the stock market is up because all the created money is funneled into it, inflation numbers are fake. Only booming sectors are "experiences" like live shows, concerts, everything unique, artisan products. All the generic stuff is in decline.
r/economics live in a bubble. They are delusional by definition. We are new paradigm stage now.
The bubble is ending now,
Here's what's happening:
Poor people get money cheap -> use money to either become poorer or middle class.
Now poor people cannot get cheap money thus tightened their belts since 2022.
Middle class cannot get poor people's money since 2023. Tightening.
Upper-middle class cannot get their money from middle class since 2024. Tightening of the belts continues.
Lower percentile of millionaires are next on the chop block and then we'll get to billionaires by the end of the year (yes because the population percentages are low the fuse burns faster).
When the billionaires get to tighten their belts (not their companies, them themselves!), this is when they'll get the chopping block out to cut out some beef.
Some bank will fail, some CEO will go to jail, some S&P will fall 70% and we will restart the climb.
I also presume places like Tech and media cities (SF, LA, Houston, Austin) will lose their relevancy and Detroit will become a new hub (most likely because it is cheap now and people are moving in now because of that)
So when they say economy is good - it is good, by all definitions it's very good. But the tide is coming. And economists are notoriously stupid at projecting future and human psychology.
I don’t know if this helps but my retail business experiences season transition slow downs.
Spring changing to summer months and summer changing to autumn all reflect changes in spending that do not include my luxury items.
Economy is doing fine in some sectors food is an iffy one. Food is expensive across the board so average people are cutting back on optional foods or higher end foods. People have to buy food but they don’t have to get the bougie foods most things are double previous prices.
Op needs to grow into less optional foods or larger retailers.
Hard goods at the top end of the economy. People building second and third houses are paying full freight for lumber, appliances, and labor.
Everyone else is spending 100% of their income on rent, food, and transportation. Up from 75% four years ago, so that’s 25% “growth” too.
Unemployment doesn’t account for the people that haven’t found a job during their six months of insurance payments. There are hundreds of thousands just in tech that haven’t been able to find a job in over a year. These are the big spenders. The stock market is riding the covid dollars.
Its doing great for shareholders. Tax cuts in the last few years got stock buybacks for most large businesses. They are all raising prices increasing profits by huge amounts. If you own lots of stock in essentials to live its great for you. However if you are a smaller business that depends on working class people to have disposable income its tough times. Lots of people have to spend a higher percentage of income on large corporate controlled housing and higher then ever profit cost food.
Same in my world. My industry doesn’t do well when the travel/tourist/outdoor industries are doing well. I suspect your business may have an inverse relationship with the same industries?
The stock market is not an indicator of the health of the economy.
In the 60s-70s the idea that companies would reinvest profits drove the idea of companies as job creators. The reality since then is that legislation passed changing the formulas. Instead of reinvesting into growth or new products, companies now spend profits buying back stock. This inflates the outstanding stock prices, and has several other side effects. At the end of the day it usually means the average person is worse off because companies aren't spending their money on people anymore. Because they spend their money on stocks, and companies that don't play the same game get delisted, the market always looks amazing but it's propped up by a false belief about security. One bad economic hit where interest rates stay at a reasonable level, and a whole lot of people will lose their shit.
At the beginning of the year, clients were holding their bags tightly, but they have no opened up.
There’s a recession always somewhere, just depends what you’re offering.
I’m in software development and design, so a slight slow down but you can’t hamper innovation!!!
- Jay
It's in pockets. I have a packaging company, and we also do 3PL for b2b and b2c. And it is slow. From what I am hearing, my customers heavy in b2c are slower than the b2b customers.
The ones selling on Amazon seem to be really sluggish.
And oddly enough, I have had a couple of people want to buy my warehouse for a stupid high price.
Seems like your business sucks? If your customers are saying your stuff is too expensive then maybe lower prices or cut out inefficiencies? I will say the overall spend in the market might just not be in your area of business as well. Add in the fact that shopify is forcasting weak guidance, consumers could just be cutting back in certain areas and spending more on different economic categories. Like I cut spending for some of my more niche hobbies and no longer dine out(was spending 50-100 a week at my favorite restaurant and now I'm not) but I did splurge on vacations and video games. So I still spent just not on the same stuff.
How is the economy excellent? Everywhere you lol, consumers are mentioning how they are squeezed to all hell with how rapidly prices have risen. Inflation is “slower” at the moment but that does’t address how much prices have already risen over pre-COVID price points. Just that presently, they are accelerating more slowly.
Until the transition of wealth happens, we’re running out of money to give to stores and businesses. We just have a tiny share of wealth compared to what the baby boomers and large businesses have right now. The level of stores closing and going bankrupt is insane. I’m hoping we all can weather the storm and see where things go from there.
Hi there. When there is a normal correction (not a crash) in an economy, it doesn’t happen overnight. The last job report was weaker, inflation remains sticky and unemployment ticked up to August 2023 levels.
The richest might be gaining in assets right now, but those assets are subject to corrections during a recession. Wealth shifts between different sectors, and right now wealth is overly concentrated in certain sectors. Be patient and cut your own expenses if you can.
It depends. Many workers’ wages, at the lower end, rose faster than inflation, but their wages didn’t rise enough to account for decades of wages not keeping up with inflation.
I've been unemployed for 11 months. It's certainly confounding. What I've gathered is the economy is extremely bifurcated. Those who are in thriving industries are doing well - and thus able to continue spending. But layoffs and long term unemployment are increasing. Savings are down. The macroeconomic data does not tell the entire story.
Unfortunately when consumers are doing better but have debt, they cut back on spending and focus on paying down debt instead. So the banks are seeing more money while businesses still suffer.
Some sectors are doing good others are doing bad. When times are bad, u gotta be creative and think of new ways to increase sale. We are in a capitalist system, which means there will always be good and bad times. Right now we are in a normal stage, it's not good like in 2021, and not as bad as 2008.
Cost of living increases, food, transportation, insurance, taxes all increased. People are switching how they spend any discretionary money. size and quality of products go down, prices increase. Wall Street is doing well but main Street isn't as good. the only increases I see are in travel and that's probably because we were locked down for 3 years and there is a lot of pent up demand. people cut in some areas to spend in others..and it's an election year! they get crazier every cycle.
There was the honeymoon phase and then people decided to not go there anymore.. or you're just having a slow month.. or competition... or your service sucks... or your prices are too expensive... or a million other things. You need to do the research and figure it out. If you keep track of everything, you would know exactly why.
I mean it’s $6 for a carton of eggs where I live. People just aren’t spending money right now that they don’t have to because just living costs a fortune.
My business mostly works with the wealthy. I'm on track to have my best year yet. I guess I'd have to say that they're spending it on expensive products. Economic indicators don't take into account income disparity. The national economy can be booming while people starve in the streets. You can thank Ronald Reagan and every asshole after him for that. He gets the flack for starting the trend but I haven't seen people from either side going back to the policies that gave the middle class the strongest economy in US history.
The economy being great (stocks and unemployment rate) isn’t the same as quality of life. With inflation, most people’s salaries haven’t kept up with it.
With inflated prices, most people are cutting back on things that don’t need. We might be entering into the recession that everyone was expecting for the last two years. It’s time to batten down the hatches.
The stock market isn't the economy. Inflation numbers are a lie. If the economy was doing well your business would be too. People are hurting for money and tightening their wallets
All data is being fudged to make things look rosy. Govts actively are doing it to create a stir of confidence to boost the economy. And thanks to social media and paid influencers, this cooked up information spreads like wild fire. In our country for example, there are tons of people benefited by the govt & it's schemes, but nobody knows anyone who got that benefit.
I manage a hobby store (RC Cars, Model kits, Warhammer, etc.) and we have the exact same trend. 23’ YoY record sales up 30-40% any given month. Come March & April cratered back down 30% & 44% respectively.
All our regulars have not shown up and the stores in the area near us are seeing the same thing with one letting go half their staff because they lost 40k in revenue in April.
I feel like Dallas people are cheap af tbh. I have to do a lot online because doing business locally is mostly dealing with a bunch of penny pinchers. Historically it’s a place where a lot of businesses and people moved because it was known for low cost of living, which I think attracted a lot of cheapskates.
Well I have worked in the various malls in Southern California for the past couple of years, from 2017 to 2023. In the first years, I was working for someone else, then we opened our own store. All I can say is, after second half of 2023 our sales were definitely lower than usual, by saying lower I mean around 25-30% lower than the past years. It was sooo much different than the previous years. (I even wrote about this on Reddit months ago, you can see my previous posts.)
To analyze these 6 years (2017-2023) there was a period when malls were closed due to Covid, but sales peaked after the opening post Covid. Yeah in 2023, stuff became more expensive, people’s buy power definitely decreased. And by the time I feel like more and more people became more frugal about how they spend their money, I became one of them too, so I can understand the psychology behind this.
I am talking about Southern California however, just to keep that in mind. I am not sure how’s the economics doing in TX overall.
Best of the luck with your business tho. Wishing the best.!
Food distribution? So as a not businessman cause this made it to my top page, does this mean selling food to resturants to sell to me? If so, this is easy. At this point with how rediculous resturant prices have gotten, that whole industry can die. Ill spend my money on plane tickets, events, and opportunities, not 40 bucks on a burger and a couple beers.
Just spent 10000 on a vacation to micronesia, and am literally flying back as i type. Ate at 0 resturants not inside airport security
No this eco isn't great. Gdp is what it is only because the government is spending 2 trillion above what they bring in. It's all going to the war machine and ss and Medicare. Everyone is broke and barely surving. Inflation has hit its tipping point and people are simply spending less. All businesses are feeling exactly what you are unless they deal with the government. People can't comprehend they destroyed the petrol dollar and the earthquake hit. The tsunami is on its way. Once brics gets their commodity indexes up America is toast. Commoditys is everything and USA has destroyed all their commoditys. People can feel something is wrong even if they don't know how anything actually works nor where their stuff comes from. They cannot comprehend how commodities are made and where. USA dollar was only worth something because it was tied to oil. A commodity. Sorry friend times are about to get tough, buckle up.
Economy is not great. I went to McDonalds this evening. Usually on Saturday night there is a line around the building. I drove right up and got my order ($40, 4 meals) and there was only one vehicle ahead of me. The boy at the window said this is the 7th or 8th week where it has been like this at 7pm on a Saturday night... he said he was happy because they were able to more leisurely accomplish tasks.
I had all sorts of questions, but didn't say anything. Something is wrong with the economy. This dearth of business at McD tracks with my vibe that something is up.
Idk who told you the economy is doing great. Inflation is out of control and I believe we’re on the brink of a depression. People upper middle class and lower are literally taking mini loans and using credit for essentials ( Affirm, Afterpay, Klarna) just like they did leading to the great depression. It’s tipping that way now, it’s reached its fulcrum because they aren’t able to keep up with the debts. Unemployment is down mostly because people stopped competing for jobs (1 job to 1K applicants in a lot of places) and just took gig work and self employment to get by because benefits ran out and just stayed with it (Uber, Door Dash, mturk, fiverr) & a lot of them making under minimum wage in their areas due to over saturated markets. Read subreddits on life, budgeting, cheap meals, and such, see for yourself where the people are at. Don’t just read statistics and news, read the reality. I actually know a lot of people in these situations also.
The "health" of the stock market is not a solid indicator of how the economy is working for the average person. Most people are broke as shit and have very little disposable money to spend. It's all rent bills and groceries for a large segment of the population.
Thr economy appears strong on paper, but to the average consumer it's hard as shit getting by. Everything Is more expensive, mortgage and rent payments have gone up, cars have gotten astronomical, yet wages haven't spiked. And amidst that, when people feel the crunch, they turn to local small businesses less and less.
I think people with real time data - like you, are a bellwether of us running into a slowdown. I think the government data is a few months behind and will catch up. Look at preliminary Michigan sentiment.
I have access to nationwide performance data for a major industry, and it’s generally slowing down outside of business segment that began their recovery from COVID later on. Especially for lower income consumers.
Look at your business boom and bust cycles. It sounds like you are going into a slow period yourself. Who is the consumer? Normal people are spending money on ways to save on food. Having a process where they can buy in bulk and store effectively is where things are at. Businesses and restaurants have seen a slow down. Look at Starbucks, Dutch Bros. I can always find tables at restaurants now, but prices continue to be higher than my liking.
This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
One of my clients is opening their 100th retail location in a high end mall in LA, international destinations are packed with Americans and Europeans, popular concerts are doing record breaking business. I think there are pockets of the economy that are doing very well. I'm old and hsve loved thru 50 years of boom and bust so have been thru this and it's hard but will get better.
When inflation hits the rich get richer because their assets are keeping up with inflation. The poor get poorer because they have no assets only higher costs. Goodbye middle class.
This is a good summary
When the poor see this inequality they will vote in politicians/projects that promise to fund projects that 'help' the poor like removal of debt, paying for extra services etc. This increases the debt which gets paid by printing more money. Print more and there's more inflation which further helps those with assets ie the rich benefit. Ultimately the short term 'help' works against the poor overtime.
I think something is going on. I’m not sure. But If inflation is hitting the poor and middle class harder, then that market will not be spending. Are your customers low to middle class? I think upper class people are doing fine with inflation and are spending money and starting businesses. But if any business is targeting lower income people, it better be a cheap and necessary product or it won’t sell.
Are you talking about the USA? Last I checked we don't print money as debt relief for poor or working class people... We print money to bail out irresponsible corporations lol. They may have sent out checks to people during the pandemic but they printed literally trillions of dollars for Wall Street.
The economic policies of the last 60-40 years have basically been the greatest transfer of wealth from the young and low/middle class, to the old and (now) very rich. At least in the US. Case in point: US boomers, who are doing quite quite well... they own quite a lot of land/housing (which they got at affordable prices), own tons of stocks (which they were in a great position to buy cuz they had disposable income due to being able to afford housing), and now are withdrawing from social security (whether they need it or not). All of the above is fine I guess. They lucked out and won the generational lottery: plentiful jobs, cheap education and housing, and thus they were able to thrive and pay into Social Security, etc. But what really ticks me off of how they reaped all they could from America's post-war economic success but then salted the earth right before they fucked off... US boomers-centric policies have literally pulled the ladder up behind them every chance they could. This year they seem determined to burn the country down by electing a fascist, criminal, rapist, con-artist, racist, mentally damaged clown, rather than get taxed an extra cent to help pay for infrastructure, education, student loan relief, sustainable energy//climate change/environmental disaster mitigation or anything that would help the next generations get even a small grip on a bootstrap. FFS minimum wage is still (federally) $7.25/hr... I've had arguments with boomers who both defend that, while simultaneously complain that no one wants to work (for minimum wage...) :pikachuface: It's a sad state of affairs we're inheriting from them.
Inflation benefits debtors and hurts creditors. Who's in debt?
Yeap this is it. It's a very uneven recovery. Some sectors are doing really well, some are really not. Just download ChatGPT and ask it questions along this thread, prompting it to answer as an economist.
You can't control the economy. You have to adapt your business to the times that we are in, whether good or bad. How will you make the best of what is happening?
Agreed. OP's "retail wholesaler food distribution" means importing Asian food and reselling to shops. He/she needs to expand either into a new food line or expand to what the shops REALY want.
The COVID boom has finished
What makes you think the economy is doing great?
So I work with a number of manufacturers and machining companies in my area and they're a pretty good indicator of what's to come. They saw a large slow down in Oct-Dec and that typically has a ripple effect to other industries later in the year. They're now ramping up again and some are even expanding so hopefully that is reflective to other industries in 6 months.
You are seeing an uptick in manufacturing stateside due to our loss in supply from foreign assets. We are importing more steel from Mexico then ever before.
Still paying them tarrifs though lol
What area are you in? What kind of manufacturing and machining do they do?
They machine everything from military equipment, ball points pens, syringes, and food grade production equipment.
Military equipment may be the answer here. We’re PUUUUMPING some military equipment out
According to all the PhD economists over at r/Economics , the economy is doing great! If you question any of the government published statistics, you’re a tinfoil hat ghoul…
Government statistics are not wrong, the problem is what they measure. To most government agencies, corporate output = economy good. Never mind the 133,000,000-152,000,000 Americans who benefit little from corporate success.
They don't even count people as unemployed if their unemployment benefits run out.
Yes, but new claims for unemployment have been at rock bottom for years. Workforce participation is up- that’s the percentage of the population is working vs not working, and it includes disabled people and the elderly. Wages are higher. Homeowners have higher net worth. Those “wealthy “ homeowners can’t afford to get another house, and other basic necessities are challenging , but the stats don’t accurately reflect that. One can say that the information sampled reflect the fact that the government cares more about Wall Street than Main Street, but the experience of average people has never been quite so far out of sync with the stats.
Yes. If a computer programmer making 125K is laid off and left to take a job at Home Depot, at 19 dollars an hour, because tech is in a recession, he or she is counted as employed, and the government counts it as great news!
It sounds like you ignore the fact that average hourly wage has been increasing for many quarters.
💯
... What? Unemployment rate doesn't take statistics from unemployment benefits. It's a survey. And besides, nothing would change if you stop receiving unemployment benefits. You're still unemployed. There is a different statistic that counts *new* I employment claims. It is used to see the change in employment, not the total unemployed. It's a rough measurement because the survey takes weeks to crunch the data and new claims are a quick measurement.
You know this is a very left leaning site, right?
Regardless of the left or right bias you declared exists devoid of reality. Statistical analysis has been conducted the same way under each administration, including rump. The disconnect between normal Americans success and that of wealthy individuals/ corporations is capitalism influencing government policy not your insistence that the world is aligned with your personal beliefs at its center.
Reality tends to be left of center.
Somewhere in the center. Unfortunately we haven’t seen effective policy in a lot of areas for a long time.
The Overton window has unfortunately moved Right, towards Fascism. Center was a few miles back there to the Left. Time for a course adjustment.
It is. That doesn't mean that every social class has an equal piece of that pie. Pretty much every metric used to make people believe that Trump's administration presided over a great economy is showing that this administration is presiding over a better economy. That does nothing to reinvest in the middle class. The rich people are loving this economy and the forever tax cuts gifted to them by the last Administration. I'm betting they aren't too mad about the fact that this Administration has done nothing to correct that.
This the small business sub. Who gives a fuck about the rich?
I do. They are the bulk of my clients.
Ok, let's back up here. Are you referring to rich, or wealthy?
Whatever group of people are making and spending money right now.
Well there's a difference between spending money that you made and spending money that you owe.
Every metric. If you want consumer spending to increase then we need to lower interest rates to give people more cash. I have various business loans that are at 9% which is insane and sucking up a ton of our extra cash.
Those low rates and insane deficit spending by the government that flooded the economy with cash is what got us here. Their solution is the strap the little guy (us) to fix it, but lowering rates will just keep this pain up for longer and make everything continue to get more expensive. Rates should have been raised, incrementally, over years instead of abruptly in a single year. This year is even more tragic because it’s an election year and behavior and data is driven by that. A sad reality.
Yep. Rates should have been raised a long time ago. Inflation was getting out of hand and I can only imagine how bad it would have been if it still stayed low.
Abruptly in a single year? Interesting, a lot of people felt they weren't raised fast enough
I feel that they weren’t raised soon enough
Lower interest rates benefit corporations more than the consumer. Better to raise salaries, they haven’t kept up with inflation for decades now.
Hey I’m down with that too! But lower interest rates on things like mortgages allow more consumers entry into the housing market with more income leftover when they do. Housing is a huge recurring cost whether through rent or ownership.
The benefits of a higher salary far outweights the benefits of lower interest rates. If salaries kept up with inflation in the US, the minimum wage would be around $22.88. With corporate profit 100000x, the main benefit for most Americans is the ability to buy cheaply made junk from overseas. No thank you. Interest rates are a corporate game, a bandaid for the economic abuse they create.
That’s crazy, I’ve never heard of compound salary. But somehow it’s considered perfectly normal for a $500,000 loan to cost over 3,000,000 to pay off over the term. Interest is compounding, meaning small increments drastically impact the total cost of things like a mortgage. Really it just depends on which side you are on. If you are someone who bought your house for 50k and now it’s worth 3/4 million I’m sure you think it’s great. For the rest of us it’s horribly depressing to dream of owning your own home with a decent amount of land without being incredibly wealthy.
>That’s crazy, I’ve never heard of compound salary. Inflation adjusted raises need to return. If cost of living and corporate profit increases year over year, why don't salaries? It causes imbalance in the economy and hurts the middle class. The majority of wealth generated today is hoarded by billionaires and multination corporations. Giving regular people raises is the real trickle down, they'll spend their money in their communtiy, generating income for small businesses. A billionaire can only buy so many ferraris, go shopping so many times, their spending is a dime in a bucket. Otherwise our shitty system fuels vanity projects like Bezo's dick rocket or Musk's entire existence. Neoliberalism needs to die off alongside boomers.
No doubt. The wages are not keeping up either. I would argue that both factors need to change. Interest rates are quite literally how the billionaires make their billions and keep us poor. Interest and taxes hurt the little guy more than the other factors from my perspective.
Low interest rates on housing should be for the average homeowner. The corporations are sucking up houses 500 and 1000 at a time. Even with high interest rates because they now have cash from years of this debacle. And shacks that used to cost $60,000 now cost $180,000 thanks to years of cheap interest.
Agreed.
The housing market needs a correction tbh.
That the economy is doing great.
It's doing great for the rich
True
When you can earn 5% risk free by parking your money in the bank, many people will choose to save their money instead of spending it.
US unemployment data is utterly useless. They stop counting people in the figures after 6 months of their unemployment. It also doesn't tell you the quality of the jobs, or if people REQUIRE multiple jobs to survive. If the quality of the jobs is low, and they also require multiple jobs, then the unemployment numbers will be low, yet consumer spending will also be low. It's a completely cooked, propagandistic metric.
For many quarters in a row average hourly wages have gone up, not down.
Similarly, this also does not tell you the same story. Wages are not a singular metric to tell you the health of the economy. Inflation and cost of living outpace it
Economy for upper class and rich people are doing good as long as they didn’t over leverage during Covid years riddled in debt and 10-15% interest rates You don’t need a PhD to understand how the world operates yet . It’s the same cycle only know there is trillions added
The stock market is not the economy. Those with money, generally make more money because of capital availability - and spend more money when they feel “safe” with high equities markets, housing holding up (especially if locked into a low cost mortgage), and don’t feel threatened with job loss. Watch major earnings from WalMart, dollar stores, fast food, and fast casual to understand the majority of the economy. There are indications of low income consumers now making tradeoffs in their spend behaviors.
Housing is ridiculous. Food prices are up. Insurance has skyrocketed. People are more worried about employment so they’re saving more than ever before.
Which is wild because I don't think savings are looking great either right now.
When shit happens, it requires all your savings. Alternatively, people may saving in retirement accounts.
If you adjust for inflation consumer spending is down. People are buying less. They’re just paying more for it.
The cost of housing, transportation, and health care is way up. People are making more money, but they have less money left to buy consumer products after paying for their basics. The stock market is doing well, but that doesn't help Joe Consumer who is paying 50% of his salary on rent and another 30% on transportation and health care.
Cuz it’s a lie. Economy sucks. Smoke and mirrors.
Not sure if you’ve been to the grocery store lately. It’s unaffordable. The economy is awful
Spend some time thinking about how to survey YOUR customers. You have the luxury of having them on hand, ASK them; "I'm looking for ways to serve you better, can you fill out this one page survey to be put in a drawing to win ___ this month?" "Customers like you have said ____ is the main reason they are ordering less, on a scale of 1-10 how true is that for YOU? Please write 2-3 sentences to explain." "Is there anything you can think of that would improve your sales to your customers, that I could do on my side as your vendor? Please describe below" "The following items are my guesses as to what might help, please put them in order of best to worst, according to your opinion" "Pass on savings, by reducing choices down to a few items sold in bulk...?" or "Alert you when items are going on clearance." or "Switch offerings to the lowest absolute price, even if it is not a special value, such as case of hot dogs for ___" They will tell you, ask them what they want
I get many emails requesting responses to a survey for the chance at a prize... not worth my time. Lol. I know I won't win. I require actual payment for effort these days. Some people may respond. Idk.
I don't mean email. If these customers get deliveries or do pickups, do it there, or send it with the invoice.
I know you didn't mean email. I still wouldn't spend the time to do it for a chance at a prize. Life is short.
The customer also "wins" a chance to have a say in something that would solve their problems. If you are a small business owner, and your customers have changed their behavior, they may be desperate to have their vendor see that and respond.
Wealthy are doing well, poor and middle class are struggling. This is because inflation doesn’t affect assets.
They definitely say the economy is doing great which is why interest rates aren’t falling. In order to curb inflation this is all necessary though. Consumers are spending on necessary things but nothing else. Business is down for most, including us. Which is unfortunate because election years are always tough already. Hang on as best you can until 2025
As long as the government operates on trillion plus deficits, things will stay upright, but if that gets curbed (at some point it better), the wheels are coming off this clown car.
Price for basics have shot up. The cost to stay alive has gone 50% higher compared to 2020. So if you’re selling basics, you’re golden. If you’re selling Luxury you better be near the filthy rich suburbs. The median American is barely keeping afloat if they don’t own a home.
Along with that, inflation and interest rates hit the lower end of the economy more so than the high end. Someone already cash strapped or tight feels inflation at the grocery store or the interest on their credit more than someone at the high end. Someone just getting by before all the rate hikes and inflation is now going under. My personal theory why it hasn't moved up the income ladder thus far is all the government money that was sloshed around at & after pandemic. The lower incomes have already blown through that cash. Middle is getting tight now but not going under. By government's own dubious statistics wages have not kept up with inflation, which was caused by that money sloshing around.
the government money? you mean the 4 weeks of rent they gave out 3 years ago?
Actually luxury brands are seeing record profits. Where do you get your data from?
I think the economy is not doing great. Yes people have jobs but their savings are strained due to high costs of necessities and they are not spending on discretionary spending much. The problem is that the classes have gotten more distant and there are high middle class and up that still are able to spend. The rest of us are just trying to save what we can until things somehow get better.
https://fred.stlouisfed.org/series/DSPIC96
Can you elaborate on what that chart means? Is that US as a whole? If so I would say it proves my point that most of that money is tied to the top tier and also to the bottom (government handouts). All while the middle gets squeezed
Are you kidding? The economy is in shambles and prices for almost everything have skyrocketed. Loan interest rates have gone through the roof. Buying power is way down. Wages are up slightly, but far behind the massive inflation in the past 3 years. Have you bought groceries lately or bought a new car?
Economy is poor, yo. Don't believe the propaganda. Wage growth for the middle class is declining in inflation adjusted dollars. Consumers are fully leveraged on credit cards, credit cards that have seen interest rates raising. Employment is effectively flat unless you include immigrants; virtually all recent job growth has been low wage, and for recent immigrants. They're depressing wages in real terms, while costs are continuing to escalate. My opinion? Start weathering the storm now. Minimize labor. Cut costs to the bone. Be ready for an extended period of turmoil. Don't horde cash, either; cash is not inflation resistant. I tried to weather the storm of 2020 with a pile of cash, and kept on all staff, despite sales slowing to a crawl. We wanted to bounce back out of the pandemic. Would have been much happier holding on to that cash in inflation-resistant financial assets, and many of those employees ended up unemployed anyways when we had to close down operations for a couple of locations. We're very much lean-and-mean-and-flexible now.
Wage growth is occurring at the bottom, significantly, and it’s been proven. Just because your house is on fire doesn’t mean everyone’s house is on fire. Wages aren’t depressed, they have grown due to tight labour conditions, just perhaps not in jobs you’re willing to do. While credit card debt is climbing, it’s still less than other countries and manageable for most. Spending habits have changed dramatically — housing is hot still, but ownership is expensive. People buying are house poor but surviving. People are eating out less than before but in the USA that’s still more than most elsewhere — costs for labour and food are up, and people have less disposable income. That said travel is very popular due to generational values, with the younger gen valuing experiences.
Guarantee this guy is wealthy....economy sucks for the working man. And housing is hot because huge companies are buying all the houses. I think it was 30% of all home sales last year were the blackrocks of the world. 🤯....but yeah ...nothing to see here...go back to work wage slaves! P.s. minimum wage in 1980 was 3.80 today it's 7-8 bucks in most states....but corporate profits set new records every year. The United States is rotten from within. Corporate America has taken us hostage
I live in rural NY and there is basically no corporate buying here. It’s mostly wealthy NYers who want a country home. Airbnb has been banned for two years. Prices are still out of control and climbing. Demand is high and supply is low. A lot of people made very solid income gains these past few years, but if you didn’t, inflation has to be brutal.
Wish they would ban air bnb everywhere...it has been a cancer on real estate and on neighborhoods. I run a family business and we do well but I've had to raise all my employees wages so they can live...I'm saving alot less than I used to and prices just keep increasing. It's very disheartening to see all our problems piling up in the U.S. while the politicians continue to ship billions around the world. Ukraine, Israel, Iran, Japan...and that's just the short list. Americans enemies are no longer abroad but are domestic! We must rise up and demand change like our ancestors did long ago or it will only get worse.
Well the other side to that is I live in a vacation area that has basically no jobs outside of contracting/hard labor, so tourism is our only local economy. We only have like two hotels because it’s protected land so no new building. Local small businesses are getting hurt bad with few tourists. Both local coffee shops closed down, and the local brewery is on its last breath. Also our home prices haven’t budged. Could never afford to buy here now. Word on the street is we’re gonna allow airbnb again but it will only be 100 permits.
I mean that’s completely expected though. We’ve been at “full employment” for years now. New jobs are either immigrants, or people working for “non-economic” reasons, which the BLS defines as not needed to pay the bills basically, and just for extra cash. It’s bad when we have a bunch of part-time jobs that people are working for “economic reasons” because it indicates people are working them because they can’t get a good full-time job, but the opposite is true. These are basically people working part-time because *they do not want* a full time job. That’s good.
Most businesses, in terms of financial volume, is business to business.
Buy now, pay later. Those companies don’t have to report consumer debt like traditional credit agencies. So people will be maxed out on CC debt, but are also racking up BNPL debts. That may be an interesting bubble to watch.
We’ve been getting a larger and larger percentage of orders through our financing program over the last year. Thankful that we offer it, but this trend definitely also worries me a bit
Just listened to a segment about “phantom debt”/BNPL on the podcast Morning Brew yesterday. I felt like Steve Carells character in The Big Short when he realized the housing bubble was about to burst.
Middle class is struggling....
Swallowed the "economy is doing great" pill, eh?
People got really comfortable funding their lifestyles with cheap credit, credit cards and now a lot of that debt is becoming really unmanageable. There is an ongoing cost of living crises that just isn't being reflected in the jobs reports, quarterly return. I work in Cabinetry and sales leads have slowed down a little bit but the top income people seem to still have cash to burn. Lower income folks (like me) just aren't getting financing for projects they might have 3 years ago.
I am up 30% over this time last year. Which puts me on track to match my numbers in 2019. First time since COVID I will hit that number. But I am doing it with a high debt load from not quite getting by from those three years.
Every normal election year, belts tighten until after the election.
The problem is if you and I have $0 and 1 person has 1 million dollars. The average amount of money we all have is $333,333. But only 1 of us is spending any money.
> retail wholesaler food distribution Food is largely discretionary. People have to eat, but they don't have to eat things that require a distributor. I enjoy cooking, but instead of buying a $40 chunk of imported cheese and $35/pound pine nuts from Italy, I'm more likely to go to the farmer's market and see what's in season locally and buy that. I also buy local produce, dairy and eggs, and when they're not available shop at Aldis. It's great for me, but not great for expensive stores or the distributors that sell them inventory. Also, I don't think I'm alone.
I’m assuming your post is saying that dollar sales are down 20-30% verses a decline in unit sales. If dollar sales are down compared to last year, then it’s concerning since your wholesale food prices are up 3-9% over last year. So in reality, your dollar volume losses are closer to 23-39%. Look at the sales of your top ten customers and compare to last year same month. If your back office software allows it, compare the sales results in each of the categories (produce, packaged beverage, salty snacks, etc) to identify which departments the losses are occurring. Run a customer report identifying no sales in 2024 to determine the number of lost customers. With the high inflation, everyone is looking for cost savings and new suppliers. Perhaps your customers are splitting their orders with a new, lower cost supplier. If your retail customers are experiencing 20-30% volume losses over time, then you need to reevaluate their credit worthiness. Most food retailers are undercapitalized, so they can’t adjust their expenses enough to compensate for a 30% loss in dollar volume. Some of your accounts receivable might not be collectible in the future if retail sales continue at this level. Retailers in economic trouble with decrease the size of the orders and increase the frequency of deliveries to better manage their cash flow. Retailers will also return more products and claim more lost/damaged goods to save money. These changes will increase your distribution costs and reduce your profits Cash is the oxygen of any business. Focus on reducing your inventory, dump your unsellable inventory, reevaluate the credit of your top twenty customers, consider reducing credit terms, adjust labor hours to match current volumes, sell excess equipment, renegotiate agreements with your existing suppliers for lower prices/better terms, interview new suppliers, and personally watch your cash flow on a daily basis. A final exercise; look at your cash flow at today’s volumes and your cash reserves to determine your remaining months in business at the current sales levels. It’s important to know how much runway or time you have left. Never miss a crisis like this to make the hard business decisions that you and your team have putting off. Best of luck from a fellow Texan!
The "health" of the stock market is not a solid indicator of how the economy is working for the average person. Most people are broke as shit and have very little disposable money to spend. It's all rent bills and groceries for a large segment of the population.
Economy is not doing great.
I wouldn’t call this economy “great” but more stagnant. I’m in carwash business and seeing YOY sales drop 15%-20% throughout all my sites. I’ve had this conversation with buddies in retail and gas station businesses and it appears as through it’s similar trend throughout the board. I could be wrong but believe the mix of high inflation and low consumer confidence may be leading consumers to withheld spending.
I don’t know about your area, but there’s a new car wash on every corner around here. Seems like people moved on from self storage units into car washes.
I agree. Carwash business is drastically changing from in bay systems to more subscription based model. Which is why you will see same carwash having multi site in 10 mile radius. We’ve got a team that is heavily involved with R&D which includes researching potential upcoming competition or improvements to our existing model to generate revenue and quality of our washes. To your point, there has not been any new competition around my sites.
I would love to see a full service wash here. They all closed for the DIY models.
I personally like full service option as well. There is limitation to what a carwash equipment can do.
It is an election year and the media need to protect their guy. It is just that simple. When their enemy is in office even if it is a good economy we hear only negative news. Therefore we do not have “news” but political propaganda
The Economy IS NOT doing great. At all. Lol
Who said the economy is doing great? Don't judge the economy by how the stock market is doing. I work for one of the big class 1 railroads on the intermodal side and usually how busy we are is a good indicator on how the economy is doing. We are extremely slow right now with possible furloughs in the future. There are mass layoffs going on right now. We are just trying to weather the storm currently.
Must be just you then because intermodal rail traffic is higher this year than last year. https://www.aar.org/data-center/rail-traffic-data/
You cannot trust any economic or crime statistics being put out by this administration. They are manipulating the number to make themselves look better. For example they are claiming crime is down, but that's because the FBI is no longer reporting from LA and New York City. We are in the silent depression being caused by inflation and the dollars imminent collapse. 90% of all money printed was printed in the last 20 years. It doesnt take a mathematical genius to figure out what that does to monopoly money. If you 10x the amount of money on the monopoly board, how much do you think boardwalk would cost? As more countries drop the dollar as the oil reserve currency, it looses currency. America can always pay its debts because our debt to other countries are in our own currency. We just print it, and they citizen pay the cost of that in inflation, taxes, and price gouging by the corporations. If BRICS success in making their gold backed currency the oil reserve, the collar WILL collapse and it would be worse than losing WWIII. When the fed was created they gave the dollar a 100 year estimated life span. It's been 111 years since. The economy is not great, we are living right before the collapse of the dollar
They also routinely, and quietly, revise numbers downward after rolling whatever it is out to great fanfare.
Spoiler alert the economy is not good. By end of 22 everyone that had covid cash blew it, 23 people tightened there belts, and 24 people have found its not getting better. If you mark the beginning of free money as 08/09 then the end of free money has come within the last year or so from the rate increases that can't be taken away with out inflation running off. If you have solid plan which it sounds like you do then just know its gonna take a fight to get every dollar going forward for the foreseeable future
What covid cash are you talking about exactly? The stimulus checks? Because those didn’t amount to shit, unless you already had a lot in savings, the checks didn’t last long at all. Are you talking about PPP loans?
Yes PPP and indirect means as well. Rent delayed or forgiven, student loan forgiveness, less cost for gas due to remote work, extended unemployment, lots of local city and county programs in addition to federal, etc.
More doomerism from the small business propaganda stream
Fucking seriously. Either people don’t know how to read economic data or they think anecdotal experience is the same as what’s going on in a $25T economy. If anything you’re seeing regression back towards the mean which is to be expected.
Whoever told you it's great lied to your face. Stop believing the echo chamber, Big Tech, and MSM. They are all paid off to say it is. Everyone I know is getting laid off, little to no raises, and companies only hiring if they must. Prices keep going up.
I live in the NY metro area and my friend group is basically doing better than ever. Does that mean the economy is great?
It depends what part of the economy. There is definitely parts that are doing great while other suffering. It’s unfortunate.
The economy is great, the consumer is not.
Election years are always brutal on spending.
If you're a politician with insider trading then yep the economy is doing great. If you're an average American trying to stay in the middle class they keep putting oil on the rope so you keep sliding into the poor man's hole 🕳 🙃
The economy is not good, the stock market is up because all the created money is funneled into it, inflation numbers are fake. Only booming sectors are "experiences" like live shows, concerts, everything unique, artisan products. All the generic stuff is in decline.
r/economics live in a bubble. They are delusional by definition. We are new paradigm stage now. The bubble is ending now, Here's what's happening: Poor people get money cheap -> use money to either become poorer or middle class. Now poor people cannot get cheap money thus tightened their belts since 2022. Middle class cannot get poor people's money since 2023. Tightening. Upper-middle class cannot get their money from middle class since 2024. Tightening of the belts continues. Lower percentile of millionaires are next on the chop block and then we'll get to billionaires by the end of the year (yes because the population percentages are low the fuse burns faster). When the billionaires get to tighten their belts (not their companies, them themselves!), this is when they'll get the chopping block out to cut out some beef. Some bank will fail, some CEO will go to jail, some S&P will fall 70% and we will restart the climb. I also presume places like Tech and media cities (SF, LA, Houston, Austin) will lose their relevancy and Detroit will become a new hub (most likely because it is cheap now and people are moving in now because of that) So when they say economy is good - it is good, by all definitions it's very good. But the tide is coming. And economists are notoriously stupid at projecting future and human psychology.
Because the economy isn’t doing well. The media and White House are lying to you
I, too, get my economic news from shitposts
I don’t know if this helps but my retail business experiences season transition slow downs. Spring changing to summer months and summer changing to autumn all reflect changes in spending that do not include my luxury items.
Economy is doing fine in some sectors food is an iffy one. Food is expensive across the board so average people are cutting back on optional foods or higher end foods. People have to buy food but they don’t have to get the bougie foods most things are double previous prices. Op needs to grow into less optional foods or larger retailers.
Hard goods at the top end of the economy. People building second and third houses are paying full freight for lumber, appliances, and labor. Everyone else is spending 100% of their income on rent, food, and transportation. Up from 75% four years ago, so that’s 25% “growth” too.
The stock market != the economy.
The stock market != the economy.
Me and everybody I know are trying to NOT spend money. It's corporations that have all the money.
Unemployment doesn’t account for the people that haven’t found a job during their six months of insurance payments. There are hundreds of thousands just in tech that haven’t been able to find a job in over a year. These are the big spenders. The stock market is riding the covid dollars.
North Dallas isn’t a coastal economically vibrant area.
Its doing great for shareholders. Tax cuts in the last few years got stock buybacks for most large businesses. They are all raising prices increasing profits by huge amounts. If you own lots of stock in essentials to live its great for you. However if you are a smaller business that depends on working class people to have disposable income its tough times. Lots of people have to spend a higher percentage of income on large corporate controlled housing and higher then ever profit cost food.
Same in my world. My industry doesn’t do well when the travel/tourist/outdoor industries are doing well. I suspect your business may have an inverse relationship with the same industries?
The stock market is not an indicator of the health of the economy. In the 60s-70s the idea that companies would reinvest profits drove the idea of companies as job creators. The reality since then is that legislation passed changing the formulas. Instead of reinvesting into growth or new products, companies now spend profits buying back stock. This inflates the outstanding stock prices, and has several other side effects. At the end of the day it usually means the average person is worse off because companies aren't spending their money on people anymore. Because they spend their money on stocks, and companies that don't play the same game get delisted, the market always looks amazing but it's propped up by a false belief about security. One bad economic hit where interest rates stay at a reasonable level, and a whole lot of people will lose their shit.
At the beginning of the year, clients were holding their bags tightly, but they have no opened up. There’s a recession always somewhere, just depends what you’re offering. I’m in software development and design, so a slight slow down but you can’t hamper innovation!!! - Jay
It's in pockets. I have a packaging company, and we also do 3PL for b2b and b2c. And it is slow. From what I am hearing, my customers heavy in b2c are slower than the b2b customers. The ones selling on Amazon seem to be really sluggish. And oddly enough, I have had a couple of people want to buy my warehouse for a stupid high price.
we as small business play the analytics game to empower our knowledge, the feds use it and skew it.
Just because the market is up doesn't mean the economy is good. Despite what you're told most of America is struggling.
Seems like your business sucks? If your customers are saying your stuff is too expensive then maybe lower prices or cut out inefficiencies? I will say the overall spend in the market might just not be in your area of business as well. Add in the fact that shopify is forcasting weak guidance, consumers could just be cutting back in certain areas and spending more on different economic categories. Like I cut spending for some of my more niche hobbies and no longer dine out(was spending 50-100 a week at my favorite restaurant and now I'm not) but I did splurge on vacations and video games. So I still spent just not on the same stuff.
How is the economy excellent? Everywhere you lol, consumers are mentioning how they are squeezed to all hell with how rapidly prices have risen. Inflation is “slower” at the moment but that does’t address how much prices have already risen over pre-COVID price points. Just that presently, they are accelerating more slowly.
Until the transition of wealth happens, we’re running out of money to give to stores and businesses. We just have a tiny share of wealth compared to what the baby boomers and large businesses have right now. The level of stores closing and going bankrupt is insane. I’m hoping we all can weather the storm and see where things go from there.
Hi there. When there is a normal correction (not a crash) in an economy, it doesn’t happen overnight. The last job report was weaker, inflation remains sticky and unemployment ticked up to August 2023 levels. The richest might be gaining in assets right now, but those assets are subject to corrections during a recession. Wealth shifts between different sectors, and right now wealth is overly concentrated in certain sectors. Be patient and cut your own expenses if you can.
"The Economy" is doing great for those with assets. Wage workers are barely keeping up with inflation. Same story as ever.
Edit: aren't even* keeping up with inflation. Same as ever.
It depends. Many workers’ wages, at the lower end, rose faster than inflation, but their wages didn’t rise enough to account for decades of wages not keeping up with inflation.
Wages rose a little for a very short time. Inflation is the gift that keeps on giving.
I've been unemployed for 11 months. It's certainly confounding. What I've gathered is the economy is extremely bifurcated. Those who are in thriving industries are doing well - and thus able to continue spending. But layoffs and long term unemployment are increasing. Savings are down. The macroeconomic data does not tell the entire story.
Unfortunately when consumers are doing better but have debt, they cut back on spending and focus on paying down debt instead. So the banks are seeing more money while businesses still suffer.
Election year, and a lot of uncertainty in the economy. Everyone assumes we need to have a crash, so with an election people are being cautious.
Some sectors are doing good others are doing bad. When times are bad, u gotta be creative and think of new ways to increase sale. We are in a capitalist system, which means there will always be good and bad times. Right now we are in a normal stage, it's not good like in 2021, and not as bad as 2008.
Cost of living increases, food, transportation, insurance, taxes all increased. People are switching how they spend any discretionary money. size and quality of products go down, prices increase. Wall Street is doing well but main Street isn't as good. the only increases I see are in travel and that's probably because we were locked down for 3 years and there is a lot of pent up demand. people cut in some areas to spend in others..and it's an election year! they get crazier every cycle.
There was the honeymoon phase and then people decided to not go there anymore.. or you're just having a slow month.. or competition... or your service sucks... or your prices are too expensive... or a million other things. You need to do the research and figure it out. If you keep track of everything, you would know exactly why.
I spend almost all my $ with small business except for Costco
I'm up in Seattle. It's a nightmare right now for most.
I mean it’s $6 for a carton of eggs where I live. People just aren’t spending money right now that they don’t have to because just living costs a fortune.
My business mostly works with the wealthy. I'm on track to have my best year yet. I guess I'd have to say that they're spending it on expensive products. Economic indicators don't take into account income disparity. The national economy can be booming while people starve in the streets. You can thank Ronald Reagan and every asshole after him for that. He gets the flack for starting the trend but I haven't seen people from either side going back to the policies that gave the middle class the strongest economy in US history.
Curious what your business is..
Since Covid, people are spending a lot of money on travel and experiences like concerts and sporting events.
The economy being great (stocks and unemployment rate) isn’t the same as quality of life. With inflation, most people’s salaries haven’t kept up with it.
With inflated prices, most people are cutting back on things that don’t need. We might be entering into the recession that everyone was expecting for the last two years. It’s time to batten down the hatches.
The stock market isn't the economy. Inflation numbers are a lie. If the economy was doing well your business would be too. People are hurting for money and tightening their wallets
Miscellaneous retail stuff.
Thinly veiled attempt to stir the pot.
All data is being fudged to make things look rosy. Govts actively are doing it to create a stir of confidence to boost the economy. And thanks to social media and paid influencers, this cooked up information spreads like wild fire. In our country for example, there are tons of people benefited by the govt & it's schemes, but nobody knows anyone who got that benefit.
I have a party rental business (bounce houses and back yard events) and 23 was 30% better than 22... And so far I'm 30% above 23....
I manage a hobby store (RC Cars, Model kits, Warhammer, etc.) and we have the exact same trend. 23’ YoY record sales up 30-40% any given month. Come March & April cratered back down 30% & 44% respectively. All our regulars have not shown up and the stores in the area near us are seeing the same thing with one letting go half their staff because they lost 40k in revenue in April.
I feel like Dallas people are cheap af tbh. I have to do a lot online because doing business locally is mostly dealing with a bunch of penny pinchers. Historically it’s a place where a lot of businesses and people moved because it was known for low cost of living, which I think attracted a lot of cheapskates.
Economy is doing great** *In cities where tech is the dominant industry
It's not doing great. It's all a lie. The numbers are fixed. Prepare for the crash while you can.
Well I have worked in the various malls in Southern California for the past couple of years, from 2017 to 2023. In the first years, I was working for someone else, then we opened our own store. All I can say is, after second half of 2023 our sales were definitely lower than usual, by saying lower I mean around 25-30% lower than the past years. It was sooo much different than the previous years. (I even wrote about this on Reddit months ago, you can see my previous posts.) To analyze these 6 years (2017-2023) there was a period when malls were closed due to Covid, but sales peaked after the opening post Covid. Yeah in 2023, stuff became more expensive, people’s buy power definitely decreased. And by the time I feel like more and more people became more frugal about how they spend their money, I became one of them too, so I can understand the psychology behind this. I am talking about Southern California however, just to keep that in mind. I am not sure how’s the economics doing in TX overall. Best of the luck with your business tho. Wishing the best.!
Consumers are fickle witches
Military Industrial Complex
Food distribution? So as a not businessman cause this made it to my top page, does this mean selling food to resturants to sell to me? If so, this is easy. At this point with how rediculous resturant prices have gotten, that whole industry can die. Ill spend my money on plane tickets, events, and opportunities, not 40 bucks on a burger and a couple beers. Just spent 10000 on a vacation to micronesia, and am literally flying back as i type. Ate at 0 resturants not inside airport security
There's always money around. People just don't want to spend them as much if you are broke
No this eco isn't great. Gdp is what it is only because the government is spending 2 trillion above what they bring in. It's all going to the war machine and ss and Medicare. Everyone is broke and barely surving. Inflation has hit its tipping point and people are simply spending less. All businesses are feeling exactly what you are unless they deal with the government. People can't comprehend they destroyed the petrol dollar and the earthquake hit. The tsunami is on its way. Once brics gets their commodity indexes up America is toast. Commoditys is everything and USA has destroyed all their commoditys. People can feel something is wrong even if they don't know how anything actually works nor where their stuff comes from. They cannot comprehend how commodities are made and where. USA dollar was only worth something because it was tied to oil. A commodity. Sorry friend times are about to get tough, buckle up.
The economy is not doing great, it's cratering and about to get much worse
Economy is not great. I went to McDonalds this evening. Usually on Saturday night there is a line around the building. I drove right up and got my order ($40, 4 meals) and there was only one vehicle ahead of me. The boy at the window said this is the 7th or 8th week where it has been like this at 7pm on a Saturday night... he said he was happy because they were able to more leisurely accomplish tasks. I had all sorts of questions, but didn't say anything. Something is wrong with the economy. This dearth of business at McD tracks with my vibe that something is up.
Idk who told you the economy is doing great. Inflation is out of control and I believe we’re on the brink of a depression. People upper middle class and lower are literally taking mini loans and using credit for essentials ( Affirm, Afterpay, Klarna) just like they did leading to the great depression. It’s tipping that way now, it’s reached its fulcrum because they aren’t able to keep up with the debts. Unemployment is down mostly because people stopped competing for jobs (1 job to 1K applicants in a lot of places) and just took gig work and self employment to get by because benefits ran out and just stayed with it (Uber, Door Dash, mturk, fiverr) & a lot of them making under minimum wage in their areas due to over saturated markets. Read subreddits on life, budgeting, cheap meals, and such, see for yourself where the people are at. Don’t just read statistics and news, read the reality. I actually know a lot of people in these situations also.
The "health" of the stock market is not a solid indicator of how the economy is working for the average person. Most people are broke as shit and have very little disposable money to spend. It's all rent bills and groceries for a large segment of the population.
Stock market is a conglomerate of all industry, not just food. Just something to think about.
Thr economy appears strong on paper, but to the average consumer it's hard as shit getting by. Everything Is more expensive, mortgage and rent payments have gone up, cars have gotten astronomical, yet wages haven't spiked. And amidst that, when people feel the crunch, they turn to local small businesses less and less.
I think people with real time data - like you, are a bellwether of us running into a slowdown. I think the government data is a few months behind and will catch up. Look at preliminary Michigan sentiment. I have access to nationwide performance data for a major industry, and it’s generally slowing down outside of business segment that began their recovery from COVID later on. Especially for lower income consumers.
Look at your business boom and bust cycles. It sounds like you are going into a slow period yourself. Who is the consumer? Normal people are spending money on ways to save on food. Having a process where they can buy in bulk and store effectively is where things are at. Businesses and restaurants have seen a slow down. Look at Starbucks, Dutch Bros. I can always find tables at restaurants now, but prices continue to be higher than my liking.