Successful Main Street business owners have always had to be resourceful and quick-thinking, but these capabilities have been tested more than ever during the past two years. Despite two years of upheaval, Main Street business owners look forward to the year ahead, hoping it will bring better luck.
Two-thirds of Main Street business owners expect solid sales growth in 2022, despite concerns about inflation and economic uncertainty. They are, however, undeterred from investing in new equipment and accommodating emerging payment methods — including buy now, pay later (BNPL). Businesses have come to recognize that payment flexibility is necessary for today’s climate to attract new customers and retain approval from existing ones. This flexibility includes acceptance of contactless cards, digital wallets and BNPL products.
These are among the key findings from The Main Street Merchant Index: Optimism Amid Inflation Edition, a collaboration between PYMNTS and Melio. The report is based on a survey of 765 business owners on Main Street USA, from Nov. 4 through Dec. 13, 2021. We sought information about their expectations for their 2022 financial performance and how it will compare to last year. We also asked them to assess the biggest challenges they expect to face in the coming year and what the biggest challenges will be to generate sufficient returns.
More key findings from the study include:
Sixty-two percent of the Main Street businesses that rely on online sales and walk-in traffic are optimistic about sales increasing in 2022. This share is larger than the corresponding shares that focus primarily on either online channels (54%) or sales at the storefront (51%), suggesting that the most successful businesses have internalized the realization that flexibility directly impacts their economic outlook.
Fifty-four percent of Main Street businesses say inflation puts their sales forecasts at risk, and half fear economic uncertainty. These concerns are more pronounced among businesses that are not entirely online — those that sell primarily through their storefronts or rely on a mix of online and physical sales.
Twenty-three percent of Main Street businesses increased prices in the past three months. Larger firms tended to be more aggressive in these price hikes: 28% of businesses with $5 million to $10 million in annual sales, and 32% of firms with $1 million to $4.99 million in sales, reported increasing prices during the past three months.
Businesses on Main Street are making plans and investments to navigate the turmoil of today’s economic reality, and a growing number are actively adopting technologies that allow customers more flexibility when paying for goods and services.
Though many Main Street businesses are optimistic about the year ahead, the strongest organizations are not waiting for economic recovery to find them. Their actions and strategies, not random chance, serve as the foundation of what is likely to sustain them through a bullish future — and beyond.
To learn more about Main Street business owners’ expectations for their financial performance in the coming year and how it will compare to last year, download the report.