Business

Small Businesses Eat The Cost Of Inflation: ‘Keep The Customer Happy Or You Lose The Customer’

The supply snafus caused the company to cut back on assembling its more complex bikes and reduced the number of models the store could stock from 19 to 12. With inflation affecting not just consumer prices but also wages, Bock had to raise pay for his four employees.

“Labor cost is my biggest fear,” he said. “People come in asking for a lot more money than ever before.”

Pedego has yet to raise its prices but may do so soon, Bock said. He’s not looking forward to it. “There are at least eight different electric bike stores in Huntington Beach,” he said. “We have to be competitive.”

The auto repair shop
As the pandemic raged through 2020, Hagop Berberian saw his business at Allright Automotive drop by a quarter. Three government loans didn’t cover all his losses. He dipped into savings.
Berberian put up a multicolored sign on the wall outside his Inglewood office: “In God We Trust.”

But just as his two-mechanic shop was rebounding this year, Berberian’s trust in the economy plummeted.

“It’s ridiculous,” he said. “Everything is going up. Even the simplest parts: I was paying 75 cents for a light bulb. Now it is $1.25.”

Recently, a customer came in to replace a tire. The same tire that Berberian had sold him six months earlier had risen in price from $65 to $85 wholesale.

“I wasn’t going to charge him $20 more,” Berberian said. “I’m a five-star shop and I don’t want him to feel cheated. So I just charged him $10 more.”

Why is inflation so high?
“COVID — and greed,” he suggested, with a touch of bitterness. Gesturing toward the Port of Los Angeles 20 miles away, he also blamed supply chain delays that have contributed to shortages.
“Millions of dollars in cargo is sitting out there on ships. People are selling the supplies they have on hand for the maximum. They’re gouging us to recover what they’ve lost in the last year and a half when people were driving less.”

Berberian thinks prices will level off in coming months. Meanwhile, he has pared his business hours to five days a week from six days, without cutting his mechanics’ pay.
“If business is good at the end of the month, I give them a bonus,” he said. “Look at what milk is costing — and eggs, groceries. I go to a supermarket and what I used to buy for 100 bucks now costs nearly 200 bucks.”

The jeweler
In a sprawling San Gabriel, California shopping center, two security guards stand sentry at Chong Hing Jewelers, a 51-year-old business that evolved from a goldsmithing company selling custom pieces to a purveyor of luxury watches and jewelry.

During the pandemic, tourism — a big source of revenue — dried up, and neighboring stores around the company’s flagship location started to close. Chong Hing moved its four stores in the San Gabriel Valley and Bay Area to appointment-only, which limited the number of customers who could visit. But business was better than expected.

Loyal customers “pulled us through,” said Victoria Lee Castro, whose grandparents founded the company. “There’s still birthdays, there’s still anniversaries, there’s still major events where they want to buy a gift for their loved ones.”

This 2021 holiday season, demand for luxury watches and jewelry is high — particularly for 24-karat gold and jade jewelry, as well as Jaeger-LeCoultre, Chanel and other expensive timepieces. Speculation that customers wouldn’t buy as much this year as before is unfounded, Castro said.
“They haven’t been spending, they haven’t been shopping, and they want to buy themselves something nice,” she said.

But it’s been hard to restock some of the store’s classic watches, including the Chanel Boy-Friend and Chopard Happy Diamonds.

And higher manufacturer prices have boosted the prices of some watches. On a recent visit to a supplier with her parents, “My mom, who has been doing this for about three decades, would just go, ‘Oh my God, now it’s this much?’ ”

Distributed by Tribune Content Agency, LLC.

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