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Local economy struggles with inflation | Companies

Prices are rising across Vermont for everything from gasoline to Thanksgiving turkey.

Vermont Country Deli in Brattleboro reports raw material costs up 4 to 5 percent from last year, and its grocery suppliers expect another 5 percent increase over the Christmas season.

“We took some minor price increases over the past year to offset these costs, but it could become more difficult to absorb while offsetting the increased labor costs,” said Bill Daley, owner of Vermont Country Deli.

According to the Wall Street Journal, inflation hit a 31-year high in October, with Americans paying more for a variety of different products and services. Treasury Secretary Janet Yellen cited labor supply and demand as the main cause during the pandemic.

According to Business.org, about 89 percent of small businesses in the U.S. have raised prices to counter inflation, and about 64 percent said they have difficulty getting the products they need to meet customer demand because of supply chain issues .

Brattleboro Development Credit Corporation (BDCC) executive director Adam Grinold said the pandemic has created a huge g – between those who continue to struggle and those who have found ways to keep their jobs or businesses alive. And he said an unprecedented amount of federal aid has gone into the Vermont economy to be used in unprecedented ways.

However, consumers are now seeing higher prices when they fill up their car, buy a turkey for Thanksgiving, pick up a tree for Christmas, or shop for the holidays. That will have future economic implications and will lead people to adjust their spending due to rising costs, Grinold said.

“Now we have a historic wage increase, but is that enough?” he said. “Once workers start gaining purchasing power, we could see a setback that will take that away.”

Grinold said a big issue is the “longstanding lean business practice that requires getting supplies the moment they are needed”.

“This system has stopped working,” he said. Companies now need to “completely redesign the way they get their inventory to produce their product”.

Grinold said the Windham County area has limited industrial and manufacturing space.

“This year we’re seeing increased demand for this space, often driven by manufacturers or companies who say to protect their supply chain, they need to buy and store much larger quantities of what they need, make sure that they have it when they need it, ”said Grinold. “Is that contributing to inflation? You have people who go out and buy more and then have to store it. This storage must be passed on to the consumer. This is a new effort that they did not have to protect their supply chain. “

Local buying decisions are always based on a person’s current and expected income, Grinold said. However, recent events make the current situation less predictable.

Grinold said the federal government initially indicated that inflation would be temporary, but from all reports it now seems likely to last for an extended period of time. He found that anyone who imports or ships items is seeing rising costs.

“We decided not to offer gift baskets this season due to the lack of products and increased freight costs,” said Daley. “We hope our customers understand these holidays and are flexible. We strongly encourage our customers to plan ahead this year to ensure they get the gifts they need. “

Back Roads Granola in Brattleboro produces, packages and ships thousands of pounds of granola every week. The company sources ingredients and supplies from the US and around the world.

“Each of our suppliers is struggling with increased costs that are passed directly on to us,” said Coral Cutting, director of finance and operations at Back Roads Granola.

According to Cutting, the company’s suppliers are facing “unprecedented challenges.”

“Climate change has made many plants smaller and / or less desirable,” said Cutting. “There is a labor shortage to harvest these crops, and then there are shipping delays and increased shipping costs.”

Back Roads Granola often needs to purchase additional pallets of goods to ensure they don’t run out of ingredients and supplies to fulfill orders.

“This puts a strain on our cash flow and creates space problems, as we have already exhausted our 12,000 square meter space here on Cotton Mill Hill,” said Cutting, referring to the property rented by the BDCC. “And although the BDCC is trying to work with us to secure more space in the future, there are no short-term solutions in sight.”

Peter Vogel, co-owner of Back Roads Granola, said the company hadn’t raised the prices on sales of its products in about four years.

At 1A Coffee in Wilmington, ensuring that coffee producers and growers generate sustainable and livable incomes is always a top priority. Co-owner Brian Holt said he paid about 300 to 800 percent above the commodity price for “exceptional coffees” prior to inflation.

“Even if we increased the price per pound of specialty coffee by $ 1 or 2, we would hardly see an increase of more than 5 to 10 cents a cup,” he said. “We believe that our business and our consumers are h -py to support these small increases in order to have the opportunity to drink and enjoy some of these beautiful coffees. Ultimately, the specialty coffee model is less sensitive to these changes at the macro level. “

Matt Harrington, executive director of the Southwestern Vermont Chamber of Commerce, said inflation is always difficult.

“It’s harder for businesses and even harder for small businesses,” he said, noting that all chamber members are feeling the effects of economic problems related to supply chain problems, labor shortages and inflation. “Our businesses have been exhausted for two consecutive years of a pandemic, to say the least, and we are facing a whole host of challenges.”

Harrington has discovered local restaurants and businesses have had to temporarily close because of supply chain issues waiting for products.

“Since our delivery van does not show up today and several employees call, the Bennington Pizza House is unfortunately closed today,” the company announced on Facebook on Tuesday. “We’ll open again tomorrow at 11 o’clock. We  -preciate your business. We will all get through these crazy times together. “

Harrington said companies also change their operating hours in response to challenges. At the same time, accommodation providers are still fully booked in a mostly quieter time before the start of the ski season.

“I think it’s probably a balance between the bottleneck, what I hear across the country that people have saved up and want to go on this vacation,” he said. “I think they might want one last hurray before winter turns it all off. And then I would just say that people spend a lot of money. “

Vogel believes consumer spending will continue to rise despite inflation, which he believes has to do with lifestyle changes. People may spend more time in their homes than out and about, he said.

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