Knox County Chamber of Commerce President Jamie Neal says her phone has been ringing a lot in recent days, as fears surrounding the strained economy mount.

“I hate for it to sound all doom and gloom, but the reality is that it’s a roller coaster right now for small businesses,” she said.

During the earliest days of the pandemic, state and local leaders feared the prolonged lockdown would permanently shutter the mom and pop shops of American Main streets.

In some communities, that fear manifested, with some 200,000 business closures attributed to the pandemic alone.

Still, however significant the hit, the number of businesses lost in 2020 did not equal the ominous predictions of many economists.

Instead, thousands of businesses were sustained by an influx of government aid, such as the Paycheck Protection Program, which provided more than $800 billion in funding to help keep businesses, and their employees, afloat and the economy moving.

But local businesses, too, remained open as a result of both community support and their own ingenuity and flexibility during unprecedented times.

Restaurants started offering curbside pickup, independent retail stores upgraded their websites to offer online shopping. As regulations changed almost daily, business owners and their employees would pivot and adjust right along with them, practically rendering themselves contortionists.

When it seemed like, perhaps, the tide was turning, 2021 brought supply chain disruptions. Olde Thyme Diner struggled to find straws and chicken tenders; Parlour on Main hair salon had difficulty getting gloves and foil sheets. Every business in every sector, for months, grappled with accessing the items they needed.

By early 2022 many of the pressures eased, and most business owners finally breathed a long held sigh of relief.

“We thought we were through the worst of it with COVID, and now this,” said Neal.

The “this” she refers to is a complex combination of issues being faced by communities and small business owners across the nation: workforce shortages, a demand for higher wages, and historic inflation that is both driving up product costs while also leaving many customers with less money to spend in stores and restaurants.

In Knox County, too, the percentage of potential consumers has diminished significantly over the past decade.

According to the U.S. Census Bureau there are 2,484 fewer residents in Knox County (as of July 2021) than there were in 2010, meaning less buying power to go around to the number of independently owned establishments that have cropped up in recent years.

All of those factors, Neal says, are likely why a handful of popular businesses in Vincennes have — just in the past three weeks — announced they are closing up shop for good.

“What I’ve been hearing from businesses are the same things we’ve been hearing about and dealing with — costs going up, workforce issues,” she said. “So it’s not just one thing, but a combination of things.”

In August alone local residents were shocked to learn on social media that Quickies Sandwich Bar, Graze 1885 coffee shop, Heritage Meats, and 2nd Street Market were all shutting down.

Procopio and Kristen Palazzolo have spent years watching from the windows of Procopio’s Pizza and Pasta, as downtown Vincennes returned to a vibrance not seen in decades. New businesses moved in and a number of residents, too, decided to make downtown their home.

After years of successfully running a restaurant, the Palazzolos, in 2021, wanted to offer something new to downtown — 2nd Street Market — a small Italian deli and grocery situated right next door to their restaurant.

“There was the new apartment complex across the street and another 300 unit apartment down the street,” Procopio Palazzolo says, pointing in the direction of Vincennes University from inside his restaurant at 127 N. Second St. “The nearest places to go for milk for them is Walgreens or the gas station.”

The Palazzolos wanted to provide an alternative, some place closer for the new downtown residents to purchase grocery staples like eggs and milk, while also providing access to Italian specialities and an old world style deli.

“We had a great response in the beginning, but gradually it kept dropping off; some days we would just have one or two customers,” Procopio said.

Despite the thin margins, they did what they could to compete with the prices offered by the larger “big box” stores.

But in the end, some of the profits earned by the restaurant had to be used to cover the costs of operating Second Street Market.

“We have really great quality meats, great products, and we have some really great customers, we just don’t have enough of them to keep it going,” said Kristen. “You have to know when to cut your losses.

Despite the disappointment, the time to cut their losses, they say, is now.

“I thought it was going to work, so I’m a little bit bummed.

“But someone said to me, ‘you did not fail; this is just not meant to be in this town right now,’ ” Procopio said.

They, too, have felt the increased pressures on the restaurant, particularly the inflated prices of products and the uncertainty of those prices from one day to the next.

In years past, they say, a business could lock in a price agreement with a vendor for a full year. Now, prices change daily with no guarantees of what tomorrow will bring.

“Two weeks ago a 24 head of romaine lettuce case was $32; on Monday of this week the rep said it will be $67,” Procopio said, offering just one example of the invoices that have, in recent months, gone up anywhere from 10% to more than 100%.

And while some of that cost inevitably must get passed on to customers, the Palazzolos say they work diligently to find the balance so that local families can still afford to come in and enjoy a good meal.

“You can only change the menu prices so much or eventually you come to get a fettuccini with chicken and it’s $25,” Procopio said. “Then it will be a long time before you come back.”

While the restaurant, says Kristen, is still thriving, a confluence of issues make it harder to earn each dollar.

“Don’t get me wrong, Procopio’s is doing well, but the small companies are suffering from food costs, labor costs, tax rates and credit card fees,” she said. “It all adds up, so it’s getting harder.”

Despite the strain, the Palazzolos say they have much to be grateful for, including a core group of loyal employees that help keep the restaurant moving at a time when many other businesses are facing crippling staffing shortages.

Could they use a few more employees? “Yes,” they both agree, but they’re getting by.

“We have always paid our employees well, and then, thank God, they’re very loyal. We have people who have been here for seven, eight, nine years,” said Kristen.

Too, they say, they’re grateful for the support of customers who keep small businesses like theirs going, allowing them to do the work they love.

“Things are not easy, but we live in a great community,” Procopio said.

Back at the Chamber of Commerce that sentiment is shared by Neal who says Knox County, in general, has long been supportive of small, local businesses.

But, she notes, bolstering those businesses is as important now as it was in the early days of COVID.

“We as a community have to stay strong in our support for our Knox County businesses and have patience with them,” said Neal, “because they are working harder than ever for what they have.”
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