As shortages of supplies and labor continue to plague businesses and retailers across the country, many small and medium-sized businesses (SMBs) are pushing an age-old message: come shop with us.

The “shop local” trend is nothing new and is perennially supported by events such as Small Business Saturday and National Small Business Week, as well as regional events supported by chambers of commerce and municipalities. But SMBs this year seem to be promoting themselves not as one option among many larger ones, but as perhaps the only option as supply chain issues worsen.

Irene Kesselman, who owns a cat toy store in North Carolina, told a local TV station that she’s been placing big orders in preparation for the holiday shopping season since the summer, and now the backroom “is absolutely stacked with merchandise.”

“We are tripping over one another, but we are dealing with it,” Kesselman said.

Etsy CEO Josh Silverman wrote in a blog post earlier this week that his company also sees opportunity in supply chain issues, since many of the sellers on its marketplaces “are businesses of one and don’t rely on just-in-time supply chains.”

“The average Etsy seller works from home without complex overseas production lines and fulfillment requirements, and their supply chain looks a lot more like locally-sourced raw materials and two hands,” Silverman said.

John Waldmann, CEO of scheduling software company Homebase, told PYMNTS in a recent interview that local businesses have been dealing with “so many challenges” over the past 18 months, but most have remained successful because “they are so darn entrepreneurial and resilient.”

“One of our customers down in Georgia with a yarn shop has been doing social selling, hosting live workshops online, on Facebook,” Walmann said. “It really is just incredible to see the creativity and that entrepreneurial spirit at work.”

Related: Higher Wages ‘Never the Top Reason’ Workers Take Jobs Amid Labor Shortage

Spirit vs. Reality

Still, entrepreneurial spirit can only go so far, and SMBs aren’t immune to the issues plaguing the larger economy. As of August, 76{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} of Main Street SMBs say their local communities have yet to recover from the pandemic’s impact, according to PYMNTS’ Pandenomics research, and are facing increased prices from suppliers, difficulty obtaining necessary equipment or supplies, and an insufficient pool of workers from which to hire.

Of SMBs in the retail trade, 42{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} said increases in supplier prices are holding them back, while 27{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} said they’re having trouble filling open positions and 28{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} said they’re having trouble obtaining the supplies they need.

Figure 4

The Path to Recovery

Many businesses say it’s important that governments lift COVID-19 restrictions to help their local economies recover, but even more important is having consumers feel confident they can leave their homes again. Seventy-one percent say leisure activities have to resume in order for local economies to recover compared to 67{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} who said recovery is reliant on the government relaxing or eliminating restrictions.

Read more: New Pandenomics Study: 76 Percent of SMBs Say Local Economies Still on Recovery Road

Additionally, 64{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} said prices for goods and services have to come down in order for local economies to recover, though it’s unclear whether that will happen anytime soon. Earlier this month, the Labor Department said U.S. inflation is running at a 13-year high of 5.4{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749}, and some policymakers have started to raise concerns that businesses and workers may begin to believe that higher prices will not come back down, causing people to change their habits.

A separate PYMNTS study found that consumers are more worried about how the pandemic will impact the economy than how it will impact their health, with over 61{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} citing strong economic concerns and 48{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} noting strong health concerns.

See: The Pandemic at 18 Months: Economic and Lockdown Fears Are Eclipsing the Contagion



About: It’s almost go time for the holiday shopping season, and nearly 90{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} of U.S. consumers plan to make at least some of their purchases online — 13{c30f02d1a3839018c3a3c8c7102050a0b32e2e4f8eba54dea6cc544f0247e749} more than did in 2020. The 2021 Holiday Shopping Outlook, PYMNTS surveyed more than 3,600 consumers to learn what is driving online sales this holiday season and the impact of product availability and personalized rewards on merchant preference.