New York

Inflation, rocky economy hitting NYC small business owners hard

There are numerous signs the economy is in trouble, but few quite so telling as the site of Mohammed Alokad standing outside his store clutching an envelope with an overdue rent bill.

Alokad owns Wally’s Deli in West Harlem and has run the business himself since 1995. But he says it’s never been as stressful to run as it is now. Alokad, 60, said he’s in debt to his landlord and struggling to sell enough to make up for it. On a recent hot August day, he stepped outside the shop for a quick break, the $36,000 bill in his hand and on his mind.

“I’ll be honest with you,” he said. “I got this bill … I gotta pay the rent.”

He fell behind on rent months ago. Although he’s trying to catch up, paying monthly and even in the middle of the month, with inflation and business stalling it feels like each payment barely makes a dent.

“It’s a bad situation,” Alokad said. “The company raises [the prices]. One week, I buy eggs, it’s $65. The next week, they say $86. We change the price, the customer complains. ‘Why would you sell to me, a couple days ago it was $3.50 for a dozen eggs. What’s the difference, it’s the same egg?’”

Alokad is one of many New York’s street vendors and small business owners who are growing increasingly worried about economic uncertainty, inflation — and their future.

The U.S. economy shrank for the second quarter in a row, the Bureau of Economic Analysis reported last week, and inflation drove a staggering 9.1% Consumer Price Index increase in June.

But for New York City businesses, the stats matters less than the reality they’re facing: Post-pandemic sales growth is slowing and decades-high inflation is making operating costs high, while also driving customers away. And it’s all happening on the heels of recovering from the devastation of COVID.

Alokad said that his higher prices have led to an increase in petty theft — even regular customers have come in and asked for credit, only to never return to the deli again. He gets so frustrated that sometimes he just walks away from the store.

“You’re losing money, and you’re losing a customer at the same time,” Alokid said. “ … It’s a bad time. Sometimes, I don’t want to be in the store. I just walk away … [I say] I’m not the boss. Most of them know me, know I’m the owner. The best thing is, I run away.”

Mohammad Youssef supports his wife and three children with his kebab cart, stationed at Columbus Circle. His costs have gone up, but at the same time, he’s selling less. Nearly every aspect of his daily operating expenses have increased — the prices of fuel, oil, bread and rice have all risen. Fries, once a cheap item he could easily turn a profit on, have increased by 50%, he said.

“We had to raise our prices by 20%,” Youssef said. “We used to sell a plate for like $8, but now we sell it for $10.”

But he said that he tries not to think about the future, instead taking business day by day.

“If I am bothering myself about what’s gonna happen tomorrow, I will have depression, nightmares,” Youssef, 44, said. “So I let it go. I’m good. I’m fine. My kids are fine. So let it go … Thinking about what’s gonna happen tomorrow, about the economy and the prices, ‘Am I gonna sell good tomorrow?’ gets you nothing, just a headache.”

While tourists have returned to the city, creating a steady stream of business, vendors said with fewer people working in offices downtown, locals aren’t stopping in for lunch as much as they did before the pandemic.

“Before, you could save some money,” Mostafa Al-Bgroy, who lives in Washington Heights and runs his cart in Midtown said. “Now, you can’t. You have to work hard, for a little [money].”

Al-Bgroy, 54, said business has been down lately — he’s seen 30% few customers in the past two months.

“Business is not going so good,” Yanette Hernandez, a manager at Bliss Beauty, on E. 161 St. in the Bronx. “People complain about the prices going up, that it’s not the same price as usual. They don’t really want to buy anything because of the prices. But I can’t really do anything about it.”

The store also permanently lost some customers who learned how to do their own hair during lockdown, Hernandez said.

“If it doesn’t [get better], then we’ll most likely have to close down the store,” she said. “Because it’s not looking so good.”

Darleny Gonzalez runs Four Thirty Three Hardware in Harlem with her husband. They’ve had the store for about 16 years, seeing it through many ups and downs.

“Everything increases yearly. But this? I’ve never seen it like this before,” Gonzalez said. “Of course I’m worried, but everything is like this,” Gonzalez, said. “ … Sometimes we have a price, like we’re selling one thing for one price, and now we have to buy it at that price. It’s crazy.”

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