While many costs have come down for small business, rents remain high and in some cases are still rising, forcing many owners into some uncomfortable decisions.
“Every time the rent goes up, we have to raise prices, to keep up with the cost,” says Adelita Valentine, owner of HairFreek Barbers in Los Angeles. “But with the cost of living, it makes it difficult on our customers.”
Other owners are choosing to be late on payments or seeking out new locations where the rent is lower. A few are pushing back against their landlord.
Although inflation is easing, it remains a top concern for small businesses. According to Bank of America internal data, rent payments per small business client rose 11% year-over-year in July. That’s more than twice the increase for renting and owning a residence, a metric known as shelter, according to the government’s monthly Consumer Price Index. That figure rose 5.1% in July.
And although the situation has improved since the height of the pandemic, a survey by business networking platform Alignable of more than 6,000 small business owners found that 41% could not pay their July rent on time and in full. And 52% said they’ve encountered rent spikes in the past six months.
