With 54% of small businesses expecting to make less in the fourth quarter of 2022 compared to the same period last year, seasonal hiring has taken a beating. Only 7% of small business employers are planning to take on additional staff this year. Last year, 36% brought in new employees, and only 29% say they’ve fully recovered from the pandemic.
Other reasons given for lower staffing numbers included higher labor costs and fear of recession. This has led some retailers (43%) to cut back on how much new inventory they’ll be bringing in.
Nationally, restaurants also aren’t hiring for the season as strongly as last year. In 2021, 56% of independent restaurants hired extra help for the holidays. In 2022, that number has been cut to 17%.
Kroger Wants to Buy Albertson: The grocery chain that took over Fred Meyer back in 1998 – Kroger – is making a move to buyout their one big competitor in Oregon – Albertson which since 2015 includes Safeway. What that means is that some stores that might seem redundant will close.
Kroger is looking at a purchase price of $24.6 billion with the benefit of gaining annual revenues of around $200 billion from almost 5,000 stores or 13% of the total US grocery market. The goal is to make a stronger combined force against Walmart and Amazon, but that cannot happen until the Federal Trade Commission, lawmakers, and several states get their two-cents-worth in about the deal.
To date, Washington State has joined up with Illinois, California, and DC to oppose the payout of a $4 billion dividend to Albertson shareholders which would officially kickoff the merger or alternatively throw the grocery chain into immediate bankruptcy. The states and DC say that the deal would create new food deserts throughout the US – on top of increasing unemployment and increasing food prices.
Other groups that want to have a say in the matter are grocery workers unions. The United Food and Commercial Workers International Union (UFCW), representing grocery workers at Albertsons and Kroger stores in Oregon, said “the proposed merger between Kroger and Albertsons has serious implications for hundreds of thousands of our UFCW members.” They added that the union “will oppose any merger that threatens the jobs of America’s essential workers, union and non-union, and undermines our communities.”
Beyond those workers you see in stores day-to-day, Oregon-based management and warehouse workers would likely see large numbers of lost jobs as well.
While Kroger claims they will invest $500 million into savings for customers, they also claim that $1.3 billion will be invested into making the customer experience more enhanced. However, a study done by Princeton University in 2008 showed that in four out of five horizontal mergers like this, prices increased between 3% and 7%. Add that to the 11% food prices have gone up since this time last year, and the likelihood of people being unable to afford food continues to grow.
New Money in Town: Recently, a committee came up with modifications to the Uniform Commercial Code (UCC) – the body that governs the specific details of commercial transactions in the US – to include some types of “electronic money.”
The committee, which was made of members of the Uniform Law Commission and the American Law Institute, was tasked with incorporating cryptocurrency “as collateral secured financing” into the UCC. The new rules are “recommended for enactment in all the States,” however each state will be responsible for how to move forward with this.
The final draft of the rules talks about “controllable electronic records” which covers blockchain-backed assets – aka cryptocurrencies – as well as future kinds of digital assets and includes nonfungible tokens (NFTs). These assets are acknowledged in the separate category known as “electronic money.”
2022 saw general acceptance of digital assets across American culture. Oregon was one of only 13 states, districts, and territories of the US that had no legislation concerning the acceptance of cryptocurrency as a value commodity for business in 2022.
2023 Business Strategies: There are a lot of viewpoints on what to expect in 2023 in the business community. With the International Monetary Fund projecting that the global economy is likely to slow and that living conditions will become worse for many people around the world, the question to look at is how solid of a footing does your company have and what does that slowing economy mean for you.
After more than two years of pandemic, 2022 brought the world a war between Russia and Ukraine, an economic slowdown in China, and inflation. Yet according to Fannie Mae, the US is still expected to see an overall economic growth of 1% partly because third quarter gross domestic product (GDP) forecasts are reading higher than expected at 2.3%. That better-than-expected GDP is expected to be tempered by a negative annualized rate coming at the end of the fourth quarter due to slowing real estate markets and increased inflation that may be brought under control by that looming recession everyone keeps expecting.
What to do?
Prioritize the space where your business has its strongest market share if possible. That seems like easy advice, but if you’ve taken a position into a new space that hasn’t panned out, don’t risk too much. In times of trouble, people like to stick to brand names they are comfortable with. Beyond that, find ways to set your business up to be ready to take over someone else’s share if they leave the market suddenly – that means keeping your assets somewhat liquid and developing the right relationships to take a step forward if the right opportunity comes.
Keep your eye on the possible digital initiatives that could grow your business. If you can find a means of automating a process and have those experienced hands doing other, more important work, then you’ll win on multiple fronts.
Maintain your values within your business. Consumers will begin to think more carefully about where they spend their dollars, so you want to look better than everyone else. And let’s face it, sustainability is the new black – especially in the Mid-Willamette Valley. Then, expect to face renewed scrutiny over where you claim to be green.