Triangle small businesses feel effects of Russia's invasion of Ukraine

Tuesday, March 8, 2022
Triangle small businesses feel effects of war in Europe
Between the pandemic and the war in Europe, already problematic supply-chain issues are getting worse.

DURHAM, N.C. (WTVD) -- In three weeks, Favor Desserts will relocate off South Alston Avenue in Durham.

The owner, Kejiuane Hester, said the grand opening was delayed several times because of wood shortages in the supply chain.

"Ever since COVID, it's been hard to get products consistently," said Hester.

And now with the Russian assault on Ukraine, Hester said he's paying $4,500 a week on supplies, double what he'd normally pay, and in some cases, he's finding shortages on wheat flour and cream cheese.

"In order for us to sustain, we need to raise our prices," he said.

Ninth Street Bakery in Durham told ABC11 that so far, it has not been affected.

But other businesses like Favor Desserts are making urgent appeals to customers.

The Cookie People in Raleigh shared a post on Instagram: "When you see small businesses raising their prices in the coming months it's not to make more money, it's to stay open."

The owners of Pressed by Spanglish in Raleigh and Spanglish in downtown Durham, say jugs of frying oil can cost them up to $60.

Normally, it would be just $17.

"Corn itself has been more expensive than it's ever been and it's just insane," said Doel Gonzalez, the co-owner of Spanglish. "Those are the little after-effects you don't really think about and how a conflict half way around the world can affect us."

Russia and Ukraine are heavy exporters of wheat, soy, corn, wood, oil and natural gas.

Tim Kraft is an associate professor of operations of supply chain management at NC State's Poole College of Management. He said the Russian invasion into Ukraine could have long-term impacts on their harvest seasons whenever the conflict ends.

"Right now for me the biggest concern is price. There will be shortages. We have seen in the pandemic we can handle shortages. We can adapt and adjust. The real impact around the economy is how much is this going to drive up the price of gasoline, the price of food and push is toward higher and higher inflation risk," Kraft said.

Experts say the one positive in all this is since the US is not heavily dependent on Russian exports, the effect here will not be as bad as for other countries.