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Economy

What Rising Costs Mean for Boston’s Small Businesses in 2026

Boston-area inflation is running at 3.7% year-over-year, led by a 16% jump in energy costs and rising shelter prices, squeezing small business margins across the region.

Ecosystem Intelligence Desk

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Illustration for “What Rising Costs Mean for Boston’s Small Businesses in 2026”

Small business owners in Greater Boston are contending with a cost environment that, while cooling in some categories, is still squeezing margins in the places that matter most: energy, rent, and labor.

What’s driving prices higher

The Boston-Cambridge-Newton metro area’s consumer price index rose 3.7% year-over-year as of July 2026, according to federal labor statistics. Energy costs are the biggest culprit, up 16.0% over the year with gasoline alone jumping 30.5%. Shelter costs — which factor into commercial as well as residential rents in many small-business leases — climbed 4.7%, and education and communication costs rose 4.5%.

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Core inflation, which strips out food and energy, still expanded 3.0% over the year, with shelter again cited as the single largest contributor to price growth over the most recent two-month period.

Where businesses are catching a break

Not every cost is rising. Apparel prices actually fell 6.9% over a recent two-month stretch, and dairy prices are down 2.9% year-over-year — the lone decline among major grocery categories. For retailers and restaurants, that’s a modest offset against the bigger increases in energy and occupancy costs.

Why small businesses feel it more than big ones

Unlike large employers, most small businesses can’t hedge energy contracts or negotiate multi-year rent concessions at scale. A double-digit jump in energy costs and a near-5% rise in shelter costs hits a neighborhood restaurant or independent retailer’s bottom line directly and immediately, often faster than it shows up in headline economic data.

That squeeze is happening against the backdrop of a broader economic picture that’s sending mixed signals: statewide job growth is outpacing the national average, but biotech layoffs, corporate relocations, and population loss have all been part of the conversation about the health of the Massachusetts economy this year.

What owners can watch for

Energy and shelter costs are the two line items most likely to keep pressuring small business margins through the rest of 2026. Boston Made’s Economy desk will continue tracking regional CPI data as new releases come out, along with the state and local policy responses aimed at easing costs for small employers.

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Background

The Consumer Price Index is produced by the U.S. Bureau of Labor Statistics and measures changes over time in the prices households pay for a broad basket of goods and services. Alongside the national index, BLS publishes indexes for a number of metropolitan areas, including Boston-Cambridge-Newton. Metro-area indexes are released less frequently than the national figure, and because they are based on smaller samples, they can be more volatile from one release to the next.

The CPI is designed to measure consumer prices, not business costs directly. Still, many of the categories it tracks, such as energy, food and shelter, overlap with the costs small businesses face. A restaurant buys food and pays utility bills; a retailer pays rent and heats a storefront. That overlap is why business owners often watch the CPI as one signal among several.

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Core inflation, which excludes food and energy, is meant to show underlying price trends without the swings of those volatile categories. For businesses with high energy use, though, the headline number that includes energy can be closer to their own experience.

It also helps to remember that inflation figures describe the rate at which prices are changing, not the price level itself. A slowing inflation rate means prices are rising more slowly, not that they are falling.

What it means for small businesses

Small businesses cannot control regional prices, but they can manage how those prices affect them. A few general practices are widely used:

  • Know your biggest cost lines. Reviewing the last twelve months of expenses by category shows which increases matter most for your margins.
  • Review your lease. Commercial leases vary. Some pass through costs such as property taxes, insurance or common-area maintenance. Knowing what can change, and when, helps with planning.
  • Look at energy use. Many utilities and state programs offer energy assessments and incentives for commercial customers. Simple changes, such as efficient lighting or better controls on heating and cooling, can reduce use.
  • Revisit pricing thoughtfully. Small, well-explained price adjustments are often easier for customers to accept than infrequent large ones.
  • Compare suppliers. Periodically checking prices with alternative suppliers can reveal savings or provide leverage in negotiations.
  • Build a cash cushion. Even a modest reserve can help absorb unexpected cost spikes.
  • Talk to an accountant. A professional can help model how rising costs affect profitability and taxes.

Key terms

  • Consumer Price Index (CPI): A measure of the average change in prices paid by urban consumers for a basket of goods and services.
  • Metro-area CPI: A CPI calculated for a specific metropolitan region, such as Boston-Cambridge-Newton.
  • Core inflation: Inflation excluding food and energy prices.
  • Shelter: The CPI category covering housing costs, the largest single component of the index.
  • Margin: The share of revenue a business keeps after covering costs.
  • Pass-through: A lease or contract provision that shifts certain costs to the tenant or customer.

What to watch

Several public releases can help owners follow cost trends, without assuming any particular direction:

  • Upcoming releases of the Boston-Cambridge-Newton CPI from BLS.
  • National CPI and core inflation, which offer a broader context.
  • Seasonal electricity supply rate changes announced by utilities.
  • Heating fuel prices during the colder months.
  • State and local programs aimed at small employers, such as energy incentives or grants.
  • Your own monthly expense reports compared with the same months last year.

Quick check: What does core inflation exclude?

  1. Housing and rent
  2. Food and energy
  3. Clothing and education
Show answer

B. Core inflation strips out food and energy, whose prices tend to swing sharply.

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The institutional news desk of the Boston Made network. Reporting is researched from wire services including The Associated Press and local sources, and written by the desk.

Economy

Fed Holds Rates in Split 10–2 Vote as Two Officials Push for a Hike; Stocks Edge Higher

The Fed held its target range at 3.75% to 4%, but Lisa Cook and Beth Hammack dissented in favor of a hike. Stocks closed modestly higher while the 10-year yield climbed to about 5.05%.

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economy fed

The Federal Reserve left interest rates unchanged on Wednesday, but the vote showed a central bank leaning toward tighter policy. Policymakers held the federal funds target range at 3.75% to 4% in a 10–2 decision. Governor Lisa Cook and Cleveland Fed President Beth Hammack both dissented in favor of a quarter-point increase.

It was the first time since 1992 that a Fed governor and a regional bank president dissented together on the same side, and Cook’s first dissent since she joined the Board in 2022. The pause comes one month after the Fed raised rates for the first time in three years, and less than a week before the midterm elections.

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What the statement said

The Committee described economic activity as growing briskly, with strong productivity and capital investment. Job gains have kept pace with growth in the workforce, and the unemployment rate has changed little. On prices, the language was blunt: “Inflation remains elevated.” The statement said the Fed wants a “timely” return to its 2% goal and added a line that stood out: “The Committee will deliver price stability.”

That framing matters because inflation has moved the wrong way this year. Consumer prices rose 3.7% in September from a year earlier, up from 2.4% in February, as the conflict with Iran pushed up oil and gasoline costs. Unemployment sits at 4.2%.

Warsh: the medicine is “starting to work some”

At his press conference, Chair Kevin Warsh described the decision as a chance to “take stock” after September’s hike. He said the overwhelming consensus on the Committee was that the Fed’s “monetary medicine is starting to work some,” while stressing that officials had reached no firm conclusions. He did not commit to a move in December.

Markets did not take that as a dovish turn. Traders kept roughly an 85% chance of a quarter-point hike at the December 9 meeting priced in, and several strategists called a December increase close to a foregone conclusion. Economists at Indeed Hiring Lab said the joint dissent signals how uneasy part of the Committee is about rising inflation expectations.

How markets closed

  • S&P 500: 7,743.98, up 21.38 points (+0.28%)
  • Dow Jones Industrial Average: 52,475.10, up 97.53 points (+0.19%)
  • Nasdaq Composite: 26,549.85, up 72.04 points (+0.27%)
  • 10-year Treasury yield: about 5.05%, up roughly 5 basis points. The 2-year rose about 4 basis points to 4.78%.
  • Gold: futures finished near $4,075 an ounce, roughly flat, after spot gold slipped toward $4,030 earlier in the day as higher oil prices revived inflation worries.

Stocks spent most of the session in a narrow range and held small gains after the decision. Oracle jumped about 11% on a bullish long-range revenue outlook, and chipmakers firmed after SK Hynix reported a sharp jump in profit. After the bell, Microsoft rose on better-than-expected results while Alphabet fell on a revenue and earnings miss, setting up a mixed open for big tech on Thursday.

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What to watch next

Thursday’s PCE inflation report, the Fed’s preferred price gauge, is the next test. September PCE is forecast to have risen 3.6% from a year earlier, with the core measure at 3.1%. A hot reading would reinforce expectations for a December hike. A 10-year yield holding above 5% also keeps pressure on mortgage rates, which reached a three-year high of 7.4% earlier this month.

This article is for general information only and is not investment, financial or tax advice. Markets move quickly, and past performance does not guarantee future results. Consult a licensed professional before making investment decisions.

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Small Business & Entrepreneurship

Before Amazon’s Drones Fly Over Westborough, MassDOT Says the State Gets a Say

A state letter reminds Amazon that no Prime Air takeoff site can open in Massachusetts without an Aeronautics Division certificate, a safety and environmental review, and at least one public hearing.

Ecosystem Intelligence Desk

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A delivery drone in flight during a supply-drop exercise

Amazon wants to launch Prime Air drone deliveries from a takeoff and landing area in Westborough. The Massachusetts Department of Transportation has a message for the company: not before the state signs off.

In a letter dated October 22, MassDOT told Amazon that the FAA approves its drones as an air carrier, but the flights are commercial operations subject to state law. No takeoff and landing site can be established in Westborough or anywhere else in Massachusetts without a certificate of approval from the state’s Aeronautics Division.

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What the state wants first

  • An official notification and review request from Amazon, which the division says it has not received.
  • Its own suitability review confirming the operation poses no safety threat.
  • An environmental impact review.
  • At least one public hearing before any certificate is issued.

The division said residents have already raised concerns about low-altitude flights over private property and possible conflicts with police, public safety crews and other drone operators.

The town has spoken, too

At a Special Town Meeting on Monday, October 20, Westborough voters overwhelmingly backed a bylaw restricting commercial drones. That bylaw still needs sign-off from the state attorney general and the Aeronautics Division.

Amazon spokesperson Lindsay Hamilton said the company remains committed to working with state and local officials and welcomes the chance to demonstrate the safety of its operations, noting Prime Air has flown in nine states with FAA approval.

Why it matters

Massachusetts is drawing a line that other states will watch: federal clearance gets a drone in the air, but the state decides where it can take off and land. For Amazon, the Westborough site is now a permitting process with a public hearing, not a launch date.

Source: Boston.com. Reported and written by the Ecosystem Intelligence Desk.

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Background

Drone delivery sits at the meeting point of two very different kinds of rules. The Federal Aviation Administration regulates the national airspace, including the safety of aircraft, pilots and operators. Cities, towns and states have traditionally regulated land use, including where businesses can operate, what they can build and how they affect neighbors. A delivery drone touches both systems: it flies through federally regulated airspace, but it has to take off and land somewhere on the ground.

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That split has been a recurring question as commercial drone programs have grown across the country. Federal approval typically focuses on whether the aircraft and the operation can fly safely. State and local reviews tend to focus on questions such as zoning, noise, environmental effects and how a facility fits into a community. How those layers fit together for drones is still being worked out in many places, which is why the Massachusetts approach described here draws attention.

What it means for Boston-area readers

For residents of Westborough and surrounding towns, the most practical point in the state’s letter is the process it describes. A suitability review, an environmental impact review and at least one public hearing all create moments when residents can learn details and share views. People who want to follow the matter can watch for official notices from the Aeronautics Division and from the town.

For businesses in the region, the case is a useful reminder that federal permission is not always the only permission an activity needs. Companies considering new technology, from drones to new kinds of vehicles or equipment, often face a mix of federal, state and local requirements, and the timing of those reviews can shape when a project can begin.

  • Residents may want to know how the review process works and where hearing notices will be posted.
  • Local officials are weighing how a town bylaw fits alongside state and federal rules.
  • Other businesses can watch how the state applies its certificate process to commercial drone operations.

Key terms

  • FAA: the Federal Aviation Administration, the federal agency responsible for civil aviation safety and the national airspace.
  • Air carrier: an operator approved to carry goods or passengers commercially by air.
  • MassDOT Aeronautics Division: the part of the Massachusetts Department of Transportation that oversees aviation matters in the state, including airports and landing areas.
  • Certificate of approval: the state sign-off the division says is needed before a takeoff and landing site can be established.
  • Bylaw: a local law adopted by a town, often through town meeting in Massachusetts.
  • Special Town Meeting: a town meeting called outside the regular annual schedule to act on specific articles.

What to watch

  • Whether Amazon files the notification and review request the division says it has not yet received.
  • How the attorney general and the Aeronautics Division respond to the Westborough bylaw.
  • When a public hearing is scheduled, and what information is made available beforehand.
  • What the suitability and environmental reviews examine, and how their findings are shared.
  • Whether other Massachusetts communities consider similar local rules on commercial drones.

Each of those steps will shape how, and whether, drone deliveries move forward in Westborough. Following the official record, rather than speculation, is the most reliable way to keep up. Public hearing notices, meeting minutes and published review documents are typically the clearest sources, and they allow residents to see the same information officials are weighing before any decision is made. Town and state websites usually post these materials, along with instructions for submitting written comments.

Quick check: According to MassDOT, what is required before a drone takeoff and landing site can be established in Massachusetts?

  1. Only FAA approval
  2. A certificate of approval from the state’s Aeronautics Division
  3. A permit from the town police department
Show answer

B. MassDOT said no site can be established without a certificate of approval from the Aeronautics Division.

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Boston Made Eats

How TGI Fridays Shrank From 13 Massachusetts Restaurants to Three

TGI Fridays had 13 Massachusetts restaurants in early 2024. Three remain, in Everett, Methuen and Stoughton. What closed, what replaced them, what is next.

Ecosystem Intelligence Desk

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Classic TGI Fridays marquee sign with red-and-white stripes

TGI Fridays began 2024 with 13 restaurants in Massachusetts; since the Millbury location closed in July 2026, the chain’s website lists three, in Everett, Methuen and Stoughton, and the brand carries on as franchised restaurants even as a bankruptcy court winds down its former corporate parent.

Millbury was the latest to go

The TGI Fridays at The Shops at Blackstone Valley in Millbury announced its closing in a Facebook post on Tuesday, July 28, 2026, according to Patch and the Worcester Telegram & Gazette. The restaurant at 70 Worcester-Providence Turnpike was one of the early tenants of the open-air plaza, which opened in 2003, the Telegram reported. A sign in the window pointed diners to the chain’s other Massachusetts restaurants.

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Both outlets reported that the company’s website had dropped Millbury and listed only Everett, Methuen and Stoughton in the state. A third-party store tracker, Mogean, counted the same three Massachusetts locations among 69 in the United States as of Oct. 11, 2026. The company has not announced any new restaurant for Massachusetts.

How 13 became three

The contraction came in waves. On Jan. 3, 2024, the Dallas-based company said it was closing 36 corporate restaurants nationwide that it described as “underperforming.” Six were in Massachusetts: Dedham, Danvers, Marlborough, Mansfield, North Attleborough and Seekonk, according to CBS Boston and Boston 25 News. Both outlets listed seven Massachusetts restaurants still open afterward: Boston, Braintree, Everett, Methuen, Millbury, North Dartmouth and Stoughton.

The same day, the company said it was selling eight corporate-owned Northeast restaurants to former chief executive Ray Blanchette, who would run them as a franchisee. Six were in Massachusetts, in Braintree, Boston’s Brigham Circle, Everett, Methuen, Millbury and Stoughton, and two were in Concord and Manchester, New Hampshire, Nation’s Restaurant News reported.

The North Dartmouth restaurant on State Road closed effective immediately on Oct. 24, 2024, the Fall River Reporter wrote, nine days before the corporate parent filed for bankruptcy. Braintree, at 60 Forbes Road, closed in the first week of January 2025, according to Patch and Boston Restaurant Talk. In a report republished by NBC Boston on Feb. 26, 2026, Boston Restaurant Talk said the chain’s only Boston restaurant, at 1626 Tremont St. in Mission Hill, had shut down and been removed from the company’s location list. Millbury followed five months later.

The company’s amended franchise disclosure document, filed in September and summarized by Fast Company, recorded one franchised closure in Massachusetts in 2025 and two so far in 2026. The filing does not name towns, but the timing lines up with Braintree, Boston and Millbury.

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What is filling the empty buildings

Several of the former restaurants sit on prominent pads beside shopping centers, and at least two have been re-leased to regional chains. Tavern in the Square took over the Braintree building at 60 Forbes Road, across from South Shore Plaza, Patch and The Patriot Ledger reported; the Ledger said the new restaurant added a 1,200-square-foot patio. In Mansfield, Burtons Grill & Bar leased the former Fridays space at Mansfield Crossing, according to Boston Restaurant Talk and What Now Boston.

At Blackstone Valley, the exit comes while the plaza is adding tenants. Patch reported that nearly 35,000 square feet of new retail space was under development there, with Shake Shack, Sweetgreen and LaserAway among the announced tenants. No replacement tenant for the restaurant had been reported as of late October.

The bankruptcy is ending; the brand is not

None of this amounts to a total shutdown. TGI Friday’s Inc., the corporate entity that owned and ran company restaurants, filed for Chapter 11 on Nov. 2, 2024, in the U.S. Bankruptcy Court for the Northern District of Texas. Franchise-owned restaurants were not part of the case. Judge Stacey G. Jernigan approved a consensual liquidation plan at a hearing on July 23, 2026, Bloomberg Law reported; Nation’s Restaurant News dated the confirmation July 24. The plan distributes the estate’s remaining assets to creditors and winds down the old entity, and court documents show it calls for no further restaurant closures, NRN reported.

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The brand now operates under Sugarloaf Hospitality, the investment group led by Blanchette, who returned as chief executive in 2025. Every U.S. restaurant is franchised, according to Fast Company and FSR magazine. Blanchette told NRN that Sugarloaf’s ownership is “independent of, and unaffected by, the parties in bankruptcy.”

The three Massachusetts survivors were all among the restaurants sold to Blanchette in 2024. FSR reported in January that the Methuen restaurant served as the test site for a holiday decor campaign later rolled out across the system.

The national picture

Massachusetts tracks the national decline closely. The chain peaked at 601 U.S. restaurants in 2008, according to Technomic data cited by the Associated Press; FSR also put the peak above 600. Franchise disclosure figures reported by Fast Company show 119 U.S. restaurants at the start of 2025 and 80 at the end of that year. A company spokesperson put the count at 76 in July 2026, the September filing showed 71, and the company’s website listed 69 franchised U.S. restaurants in October, FSR reported. The sources do not reconcile the 71 and 69 figures.

The September filing projected no U.S. openings in 2026. On Sept. 29, the company announced its first domestic development deal in more than a decade, with Bliss Bites LLC, for five restaurants in New York State over three years. Chief operating officer Ashley Kirkley told FSR the company expects about 20 U.S. openings over the next two to three years. None has been announced for Massachusetts.

The Newsroom Take

Going from 13 restaurants to three is a 77 percent drop in under three years, close to the chain’s national slide from 269 U.S. restaurants at the end of 2023 to 69 today. The Massachusetts closures arrived in clusters tied to corporate events: the January 2024 pruning of company stores, the abrupt closings around the 2024 bankruptcy filing, and then franchise closures in Boston and Millbury. The liquidation plan removes one risk, since it calls for no further closures, but it does not remove the ordinary one: a franchise operator deciding that a lease no longer pays. That is how the two most recent Massachusetts closures happened. The quick re-leasing in Braintree and Mansfield also shows that the big boxes remain valuable to landlords, which means a weak Fridays lease can be replaced. For now, Massachusetts is a holdout market, not a growth market, for the brand.

What it means for you

  • Check the chain’s online locator before driving to a TGI Fridays. Everett, Methuen and Stoughton are the only Massachusetts listings, and recent closures were announced on local Facebook pages with little notice.
  • When the corporate parent filed in 2024, the judge allowed the gift card program to continue; court papers showed about $49.7 million in outstanding cards, Fortune reported. Anyone holding an older card is better off using it at an open restaurant than waiting.
  • Workers at the remaining restaurants are employed by franchise operators, not by the liquidating corporate entity. Anyone with a claim against TGI Friday’s Inc. can follow the case, No. 24-80069 in the Northern District of Texas.
  • Shoppers near South Shore Plaza, Mansfield Crossing and Blackstone Valley should expect former Fridays pads to keep turning over to regional restaurant chains.

Test yourself

1. How many TGI Fridays restaurants were operating in Massachusetts at the start of 2024?

Answer: Thirteen; six closed in January 2024, leaving seven, according to CBS Boston and Boston 25 News.

2. Which three Massachusetts locations does the chain still list?

Answer: Everett, Methuen and Stoughton, after Millbury closed in July 2026.

3. What does the liquidation plan confirmed in July 2026 actually do?

Answer: It distributes the remaining assets of the old corporate entity, TGI Friday’s Inc., to creditors and winds it down, while franchised restaurants keep operating under Sugarloaf.

4. What replaced the former TGI Fridays in Braintree?

Answer: Tavern in the Square took over the building at 60 Forbes Road, across from South Shore Plaza.

Discussion

  1. Did the 2024 sale of six Massachusetts restaurants to a former chief executive slow the state’s decline, or only delay it?
  2. Should restaurant chains give the public and employees more notice before closing a location?
  3. What should replace large casual-dining buildings at suburban plazas: new restaurants, or other uses entirely?

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