Philadelphia Business Owners Struggling With Whether To Raise Prices As Supply Prices Continue To Rise
PHILADELPHIA (CBS) -- Whether it's food or gas prices, daily goods and services cost a lot more. The Biden administration and the Federal Reserve insist that the economy is not in a recession.
Government figures show the gross domestic product fell at an annual rate of 0.9% from April through June. This marks the second straight quarter the economy has contracted, falling 1.6% at the start of the year. Experts say this typically indicates a recession.
President Joe Biden met with a group of corporate executives Thursday as signals flashed of an economic downturn. He said the slowdown is necessary to tackle rising prices.
On top of the rising prices, Americans are dealing with higher interest rates, which make it more expensive to borrow money. Eyewitness News spoke with one business owner who shared how they're making ends meet.
Visiting Spruce Street Harbor Park is like a mini getaway in the city, but an owner at the park says the fun and shade are no escape from growing economic pressures.
The current economic landscape is leaving business owners to consider tough decisions -- raise prices or cut back on employees.
"First, it was the milk that went up," French Toast Bites Owner Charisse McGill said. "Then it was the eggs that went up and a month ago, our bread went up for the first time since 2017."
McGill owns the stand French Toast Bites at Spruce Street Harbor Park. She hasn't had to raise prices yet, but she says the cost of her supplies has gone up.
"The difference with this summer is the cost of operations has increased about 20% due to the rapid rise of food supply," McGill said.
Local residents like Norman Kane say cutting back on eating out can help.
"You have to be smart. Spending, you just have to be smart right now, no matter what it is, whether it's food, expenses," Kane said. "Whatever it is, you just have to be smart."
But McGill says small businesses are being impacted as more people are choosing to stay in and save.
"We haven't raised our costs yet and I haven't cut our staff's hours yet or anything like that yet," McGill said. "We're navigating through the inflation."
McGill says she's making it work for now, but come next summer?
"I think we're about a season away from upping the cost just a little bit because we still have to function," McGill said.
Many families shared with CBS3 that they're making tough decisions on ways to cut down, but experts say people shouldn't fret.
A weekly trip to the grocery store has hit many with sticker shock.
The brand-new grocery outlet Bargain Market in Sharswood held its grand opening Thursday in an area known as a food desert. The owner hopes to keep prices affordable.
"We pass on the savings because our buyers buy at such a low price," Bargain Market owner Donta Rose said. "We get to pass that on."
Other big concerns are interest rates climbing and the cost of housing.
"Like most families, Philadelphia Housing Authority residents are pressed to make ends meet," PHA President Kelvin Jeremiah said. "You have the inflation and higher interest rates."
Jeremiah says the current economic issues are only temporary.
"This won't last forever. There is hope," he said. "Who doesn't want a great deal in this environment? I do and definitely, the residents do as well."