New Survey Shows Main Street Businesses Fighting Economic Uncertainty With 3 Key Investments

Main Street U.S.A. business owners have endured two years of false starts and lost sales due to the pandemic, but many are optimistic about putting it behind them. Fifty-six percent say revenues will increase in 2022, a notable improvement from the 45% reporting yearly revenue increases last year.

Still, this optimism is being tempered by a growing apprehension surrounding the economy. The portion of Main Street business owners currently forecasting revenue gains in 2022 is smaller than the 64% that expected increases in November 2021. Though they worry less about the pandemic’s negative effects on their businesses, PYMNTS’ research shows that 54% are concerned about inflation and 46% worry about the economy’s uncertainty.

These are some of the findings in The Main Street Economic Health Survey: Navigating Economic Uncertainty, a PYMNTS and Melio collaboration. PYMNTS surveyed 532 Main Street businesses in the United States from Jan. 21 to Feb. 13 about their views concerning the economy, this year’s business prospects and the risks they are facing. We also examined businesses with three sales profiles: those that sell mainly online, those that sell primarily from their storefronts and those that use both channels equally to serve customers and make sales.

Some additional key findings include:

• Twenty-three percent of small- to medium-sized businesses (SMBs) on U.S. Main Streets and side streets now say inflation is the biggest challenge they face. Roughly one-quarter of these businesses have raised prices as a result. Businesses making the most sales through physical storefronts have somewhat greater concerns about inflation than the firms that sell more online.

• Twenty-two percent of Main Street businesses raised prices on goods and services to compensate for inflationary pressures and the extra expenses that come from hiring new employees and increasing wages. Retailers were the most aggressive at instituting price hikes, with 27% raising prices. Twenty-three percent of Main Street businesses that sell primarily online increased prices, compared to 21% of the establishments that mostly do business from a physical location.

• Sixty-eight percent of Main Street businesses plan on investing in operations, but firms that do most of their business online are more likely to do so. Seventy-five percent of these firms say they will make investments in operations, while 59% of the firms that conduct business mostly through storefronts say the same.

Firms are taking steps to secure appropriate cash reserves and credit access to navigate the uncertain economic environment. Main Street businesses with the best prospects are investing in equipment, employees and marketing campaigns to increase customer bases. As these investments start to bear fruit, these firms will be able to set themselves apart from the competition.

To learn more about Main Street businesses and how they deal with rising costs and economic uncertainty, download the report.