A lot of small businesses push the price increases onward. Food distributor says all your burger patties are +10%, all your burgers are +10%, unless you think its very temporary.
One benefit of local "anything" is that the prices are often way better. Ex: Live in a small town, the land rent can regularly be $1-2/sq. ft./month ($10-20/yr) while a quick on Sydney (where Gamurs is located) runs $8-10/sq. ft./month ($90-$100/yr).
Frankly, Sydney's mostly already subdivided into work shares from what I've seen, and its difficult to even find a spot that's not just $500-1000 / worker / month rates (or "contact for price"). Its part of the reason Sydney's childcare is ridiculous, cause the space to even have a facility cost so much (and you have to have a min reg space per child).
Right, so I think people understand inflation. But apart from that? At least I didn't understand OP as meaning that growth is meant to keep lowering prices and raising wages even in the presence of inflation.
I run a small business, know plenty of small business owners and this isn't really the full story.
Small businesses do frequently fail, but it's more to do with the fact that anyone can start one than the fact that they are small. If you allowed random people with no experience to start billion dollar megacorps, they'd fail too.
And there are plenty that generate pretty serious profits, triple or more what you could earn in a traditional job.
It might be a lifestyle business (or a way to keep a rich person's spouse busy) in which case you can live on only employing family.
Also, there just wasn't inflation in some places for a few decades, so they just haven't had to deal with it. (Which also means there hasn't been wage growth.)