SALT LAKE CITY — As the Federal Reserve prepares for another interest rate increase to cool inflation, small businesses are dealing with rising costs every day.
“Almost overnight we saw a 30% increase in our costs, said Molly Kohrman, owner of Brownies!, Brownies!, Brownies! in Salt Lake City.
The Consumer Price Index data published by the Bureau of Labor showed the price of flour rose 23% in the past year, the price of butter rose 25% and the price of eggs increased 39%.
Those increases represent a year-over-year change. Kohrman says it’s even worse compared to before the COVID-19 pandemic began.
“Before COVID, I could buy a case of eggs for $20,” she said. “Now when I go to the store, I am looking at about $45-$60 or more per case.”
Eggs, flour, butter and sugar are all essential ingredients in the baking process.
Despite the increase in costs, Kohrman has avoided passing those costs to her customers and has not raised her prices.
“I am going to do everything I can to avoid that,” she said. “It’s always been really important to me to make our product accessible to our community.”
She has found more inexpensive packaging to help offset some of the rising costs, but fears that may not be enough.
She hopes lawmakers in Washington, D.C. reauthorize the Small Business Administration and provide more funding and initiatives to help small business owners compete with big businesses and deal with a new world of challenges in the post-covid world.
Kohrman fears if something isn’t done to help mom and pop shops, communities will lose some valuable assets.
“If you want any kind of local flavor, if you want any personality in your community – it comes from those small businesses,” she said. “Without these local businesses you are going to lose so much of the community.”
