South Shore businesses struggled through 2021. Will this year be better?

QUINCY – While 2020 brought a pandemic, layoffs and a five-month closure of her Quincy storefront, Christina Bartkus said it also brought small business loans, online orders and an emphasis on shopping local.

Bartkus, who owns Purefections Chocolate in Quincy Center with her sister, said 2021 was almost more difficult as a family-owned business trying to meet customer demand with fewer workers and higher prices, all while still up against COVID-19.

“Orders did come back, but we lost a ton of corporate clients and in 2021, the (Paycheck Protection Program loans) didn’t exist,” Bartkus said. “We’re busy again, but not as busy. We have less people working and we feel more strained. We had supply chain issues, shipping delays and inflation that made 2021 very challenging.”

For local businesses, 2021 was somewhat of a mixed bag. While COVID-19 restrictions eased and more people looked to eat out, shop and use local services, businesses faced hardships with staffing shortages, increased costs and hard-to-get supplies.

Many business owners say they feel optimistic about the next six months, but the latest monthly survey by the National Federation of Independent Business showed that high inflation and a lack of qualified workers are the biggest issues facing small businesses.

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Tim Cahill, president of the Quincy Chamber of Commerce, said what he heard most from local businesses was that it was extremely hard to find workers following the pandemic, and supply chain issues impacted nearly all sectors in 2021.

“Those who were able to get supplies had to pay through the nose, and that wasn’t just for restaurants, but in all cases, whether a gift shop, hairdresser or barber,” he said.

COVID-19 is still creating hurdles, especially as the omicron variant spreads and another surge hits the state. Bartkus said she caught the virus in December and was forced to close the store the week before Christmas, which is one of its busiest times. Purefections just recently reopened its retail store in hopes of a successful Valentine's Day.

“If it was a normal world, I’d have two or three part-time workers who could have gone in and run the show for me, but anyone who knew how to run the show we had to lay off,” she said. “It’s a true struggle for family businesses.”

Cahill said he's been struck by the resiliency of small businesses, who have adapted to whatever challenges they face and worked through anxiety about the future. He said business owners who have founds ways to adjust, as needed, seemed to fare well in 2021.

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"Businesses continue to adapt to what their customers want. If customers want delivery, they'll offer delivery. If you want to eat outside, you can eat outside," he said. "Whatever you put in front of people, they will make it work, and I believe 2022 will be a very good year once we get through this surge of COVID and we settle into a predictable pattern."

Both Bartkus, of Purefections Chocolate, and Cahill said people returning to in-person jobs would help drive recovery in 2022. Many small businesses rely on foot traffic and customers dropping in after work or during lunch breaks, they said.

“Before, we always had people running in on their lunch break, but in 2021a a lot of people were working from home so there’s less foot traffic,” Bartkus said.

Despite a huge shift to working from home in 2020, Bay Copy, in Rockland, which sells and services office equipment, has made it through without laying off a single person.

Ray Belanger, the company’s president, said 2020 was a crash course in protective equipment and keeping employees safe as they went into medical offices and hospitals.

He said demand “shot up” in 2021, but his company was not immune to the supply chain issues plaguing nearly every industry.

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“We finally got a couple of big orders and then couldn’t get the supplies to fulfill them, so we’re working through that now,” he said.

Belanger said customers in downtown Boston have been slower to bring employees back in person, but he's starting to see more and more people return to their jobs.

"There is definitely a demand to get people back into the office this year," he said.

Peter Forman, President & CEO of the South Shore Chamber of Commerce, said most South Shore businesses took a step towards recovery in 2021, and many experimented with new business models or strategic plans.

“I think many were coming out of it in 2021 and trying to figure out what will permanently change in the economy and business relationships,” he said. “There is a lot more external thinking about the future, rather than immediate survival.”

Forman said issues like staffing shortages and handling of overhead costs like commercial space impact all industries, so it doesn't seem like any one industry is doing much better than the others.

"You can go into any sector and see some who thrived and some who got set back," he said. "The ones who seemed to thrive the most are businesses who learned they can cut some expenses and overhead by adjusting how they work, and that was often reducing space or maybe reducing staffing and adjusting."

Positions are getting harder to fill nationwide as Baby Boomers retire amid the pandemic. As of the third quarter of 2021, 50.3% of U.S. adults 55 and older said they were out of the labor force due to retirement, according to Pew Research Center.

Overall, Forman said he senses more optimism about 2022, though businesses will likely continue to see a lot of employee turnover and changes of ownership.

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"Older owners are accelerating their exit plans, and we think it will create a lot of new energy and a lot of business startups with people moving around to accommodate lifestyle preferences and quality of life," he said.

Calli McPherson opened William James Gifts, a gift basket business, in August 2020 from her home and opened a brick and mortar store in Quincy Center in October. She said her mother runs a gift shop and she always wanted to open one of her own, so she used the time at home during the pandemic to get started.

“When we first started the biggest challenge was getting our name out there because everything was virtual and there were no marketing opportunities,” she said.

While some orders never showed up due to supply chain issues, McPherson said it forced her to pivot and work with more local small businesses.

“In general, businesses will continue to have supply chain issues, but I think it’s another reason to lean into small local businesses, which is great,” she said. “It’s an opportunity versus a challenge.”

James Dunphy, chief executive officer and president of South Shore Bank, said it seems overall that most of the bank’s business clients are navigating the challenges of the last few years, and some are doing well.

“Certain retail and restaurants are having to do rolling closures due to staffing, and they definitely feel margin compression with inflation pressures, both in wages and supplies,” he said. “They may not be able to get all the materials, but with reduction in overhead, they’re navigating through."

Dunphy said he would have expected to see more business loan delinquencies through the pandemic, but most have continued to make payments, in part due to the programs offered by the federal government. He said 2022 could prove more challenging for some businesses as the funding provided through those programs dries up, while others could see recovery slowed by issues like staffing.

"Some are surviving and doing OK, but they could be doing significantly better," he said.

This article originally appeared on The Patriot Ledger: Businesses look ahead to 2022 after a year of recovery, new challenges