Enjou Chocolat, a modest confectionery in Morristown, New Jersey, continues to grapple with the economic pressures of inflation, with rising costs of cocoa and escalating labor expenses taking their toll. Consequently, the boutique chocolate shop, which employs approximately two dozen staff members, has recently increased the prices of numerous items for the third time within the past year. This decision has been met with significant customer discontent, as reported by, a business partner. He recounted an incident where a long-standing customer, accustomed to purchasing half-pound bags of foil-wrapped chocolate at $10.99, was outraged by an additional $4 charge. The customer declared it an "outrageous overcharge" and threatened to cease patronage, a sentiment that deeply affected he. Although inflation has subsided from the peak levels observed in 2022, it has left a lingering bitterness that is believed to have contributed to President-elect Donald Trump's significant triumph over Vice President Kamala Harris in the recent US presidential election.

Like the general public, small businesses have also been adversely affected by inflation over the years, and they remain resentful, as evidenced by the monthly surveys conducted by the National Federation of Independent Business (NFIB). Small businesses, which typically operate on slimmer profit margins compared to corporate giants such as Walmart and Amazon, are more sensitive to the impact of increasing costs. This heightened sensitivity often compels them to pass these additional expenses onto their customers. The necessity to raise prices comes at an inopportune time, as the holiday season, a crucial period for many small businesses in the United States, is fast approaching, and consumers are more assertive than ever in resisting higher prices. The Small Business Index indicates that a staggering eight out of ten small retail businesses rely on holiday sales to achieve their annual profit objectives.

According to the NFIB's most recent survey of around 1,200 small businesses, a seasonally adjusted 26% of respondents indicated in October that they intend to raise prices. Chinsky questioned, "Customers perceive us as attempting to exploit them with high prices, but we're not. The real question is, will there be sufficient demand at the increased prices to compensate for those who now refuse to buy?" It didn't take long after inflation reached a four-decade high in June 2022 for consumers to start pushing back against escalating prices. The Federal Reserve's Beige Book report, a periodic compilation of survey responses from businesses nationwide, consistently detailed instances of customers challenging price increases as early as that year. The latest Beige Book continues to document tales of consumer resistance.

Richmond Fed President Thomas Barkin stated in a recent speech, "Frustrated by high prices, consumers are opting for more affordable alternatives, such as switching from beef to chicken, from full-service restaurants to more casual dining options, and from well-known brands to private labels." He added, "Businesses that set prices are realizing that their capacity to raise prices is now constrained by consumer reactions." Large retailers like Walmart and Target have announced extensive price reductions this year to attract consumers weary of inflation, with Target revealing last month that it is lowering prices for over 2,000 items for the holiday season. However, the situation is not as straightforward for small businesses.

John Waldmann, CEO of Homebase, a payroll software provider serving more than 100,000 small businesses, stated that the predicament faced by Enjou Chocolat is a common one. "Small businesses are generally hesitant to raise prices, so when they do, it's out of necessity," Waldmann said. "They continue to face inflation from all angles." Since inflation began to surge in 2021, it has consistently been identified as the primary concern among small businesses in the NFIB's monthly sentiment survey. The NFIB's latest report stated, "(23%) of business owners reported that inflation was their most significant operational challenge (higher input and labor costs), unchanged from September and remaining the top issue."

Despite the growing intolerance of consumers towards higher prices, there is optimism that they may still be willing to spend during this holiday season. The Conference Board reported in its annual holiday spending forecast released on Tuesday that the average US consumer plans to spend a nominal $1,063 on holiday purchases this year, marking a 7.9% increase from 2023 (although, when adjusted for inflation, this figure is below pre-pandemic levels). The survey indicated that older and lower-income consumers are planning to cut back on holiday spending this year. However, will American shoppers support local businesses that typically cannot offer broad price reductions like large retailers?

Sarah Jordan, Chief Marketing Officer at Constant Contact, which published a recent survey showing that 78% of over 3,000 consumers surveyed said they "plan to holiday shop at a small business they have never purchased from before," stated, "While consumers are concerned about some inflationary pressures and their holiday budgets, there's still a strong commitment to support local businesses." There is also no indication that American consumers are cutting back at this time: recent government data released on Friday revealed that retail spending increased by 0.4% in October, slightly higher than expected, while the September figure was revised up significantly to a robust 0.8% increase from the initially reported 0.4%.

Bill Dunkelberg, the NFIB's Chief Economist, said in a statement, "Ongoing inflationary pressures continue to challenge our Main Streets, but owners remain hopeful as they head toward the holiday season."