Dive Brief:
- Sixty-three percent of small restaurants said Republican control of Congress would benefit their businesses, according to Alignable’s Small Biz Midterm Election Poll of 4,795 small businesses. Participants were surveyed between Oct. 1 and Nov. 2.
- Respondents’ main reasons for favoring a Republican-controlled Congress include the current state of the economy, inflation-induced challenges, rising interest rates and recession fears, per Alignable.
- As of Sunday, the Democratic Party has maintained control of the Senate. Party control of the House of Representatives remains undecided as of Monday morning.
Dive Insight:
Most of the Alignable survey respondents (35%) listed themselves as Republicans, compared to 16% that self-selected as independents and 15% as Democrats. Fifteen percent reported they have no party affiliation and 14% said they prefer not to identify their party preference.
This party affiliation breakdown is consistent with general small business trends.
“Many small business owners say they are fiscally conservative, and don't like ‘big government.’ Instead, they would rather have more control over their financial destiny instead of relying on help from governmental authorities,” Alignable wrote in its report.
Fifty-four percent of respondents said they are “highly concerned” by rising interest rates, and stated this economic pressure has already harmed their operations.
The Federal Reserve’s interest rate hikes are designed to decrease inflationary pressure, which could benefit small restaurants in the long term, but potentially force operators to slash investments in their businesses and borrow less from lenders.
To mitigate inflationary pressure, restaurant chains big and small are hiking menu prices. In a survey by Rewards Network, over 90% of restaurant respondents said they have increased their prices since March 2020.
Some operators are slashing their hiring plans despite the impending holiday season. At the beginning of Q4, only 39% of restaurants reported they plan to hire extra employees for the holidays, compared to 56% during the year-ago period, per past Alignable data.
These strategies haven’t necessarily increased restaurant confidence, however. Thirty-three percent of Alignable survey respondents said they are at risk of shuttering their businesses before 2023 if their revenues don’t increase in November and December.
Only 24% of small businesses reported they are matching or surpassing pre-pandemic monthly revenue. This is a 19% dip compared to sentiment in December 2021, when 43% of small businesses said they were fully recovered, per the survey.
