Stress levels soaring Chamber of Commerce survey indicates majority of businesses are worried about inflation
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Kylie Stomp has hit a wall.
“There’s only so much you can charge for a T-shirt,” she said. “People will just walk away if it’s any higher than what I have it at.”
She’s adjusted the price tags on her clothes and prints at Boomerang 360 as the cost of production — and keeping the Hargrave Street shop’s lights on — have risen.
Another jump in wholesale product prices will put Stomp in a predicament.
“(I’m) kind of at the max of what I can charge for things in my shop,” she said.
Stomp can’t afford to lose customers: in-person traffic isn’t back to pre-pandemic levels because many downtown staff still work remotely, she said. She’s relying on online sales to fill the void.
“I’m lucky that my space isn’t… huge,” she said. “If I had a bigger space, there’s no way I would’ve been able to keep it going (over the past two years).”
She’s a one-woman show in a less than 300 sq. ft. store — still, she’s among a majority of business owners who stress about inflation.
About 56 per cent of Winnipeg businesses expect inflation to be an obstacle over the next three months, according to a new survey from the Canadian Chamber of Commerce and Statistics Canada.
Nationally, 60 per cent expressed concern about inflation, a record high for the survey, which began in early 2020.
Manitoba’s inflation rate hit eight per cent in August. It’s cooling from the 8.8 and 9.4 per cent of July and June, respectively.
“It’s… not knowing how people are going to react to it, if they’re going to spend less money, especially around the holidays,” Stomp said. “That’s a little unpredictable right now.”
Constance Menzies, owner of Chocolatier Constance Popp, echoed Stomp.
“We’re entering our busy season… how is that going to play out for us? We can’t force people to come and shop here,” Menzies said. “Are the big Christmas orders going to come in?”
The chocolate business hasn’t raised its prices, even though costs in every area have increased — insurance, utilities, shipping, wages, Menzies said.
“I don’t know if we can increase our own prices… to the customer,” Menzies said. “The chocolate now is at the maximum amount.”
Instead, she’s reduced the St. Boniface shop’s hours and spent a lot more frugally. Manitobans are continuing to buy treats, Menzies added.
“The next six months, eight months will be very telling,” she said. “If we start to see some of the prices come down, then I won’t have to raise my prices, (and) I can extend my shop hours… I’m still in limbo.”
Menzies said she paid off her pandemic-era Canadian Emergency Business Account loan this summer.
Stomp is chipping away at Boomerang 360’s pandemic-era debt; so is Boutique Anya in the Exchange District.
“(It’s) something that I’m working towards very, very slowly,” said Alicja Dalecki, Boutique Anya’s owner.
The average Manitoban business currently carries $79,000 in COVID-19 related debt, according to data from the Canadian Federation of Independent Business.
“I don’t know if we can increase our own prices… to the customer. The chocolate now is at the maximum amount.”–Constance Menzies
Sixty-three per cent of Manitoban businesses are shouldering such debt, said Kathleen Cook, the CFIB’s director of provincial affairs for Manitoba.
“Small businesses’ margins are shrinking with inflation, so the amount of cash on hand they have left to pay off their debt has decreased,” Cook said.
The national organization is calling on Ottawa to further extend CEBA loan payments to the end of 2024. In January, the federal government pushed the deadline to December of 2023. Those who pay by then will be forgiven up to one-third of the loan, which capped at $60,000.
“(It) seems like a long way away to a lot of people, but for small business owners who haven’t yet recovered, it’s looming over their heads,” Cook said.
A recent CFIB survey found more than three-quarters of Manitoban small businesses want governments to focus on reducing their taxes this fall.
Going forward, 32 per cent of Winnipeg businesses expect to raise their prices by the end of the year, according to the Canadian Chambers of Commerce and Statistics Canada survey. It’s a dip from last quarter’s 39 per cent.
“We still want to be a place of… delight for people. I’m not going to let COVID, or lack of this or too much of that, or high prices… get in my way.”–Constance Menzies
Recruiting skilled employees remains top of mind — about 37 per cent of Winnipeg businesses cited it as an obstacle over the next three months.
However, more than two-thirds — 68 per cent — of Winnipeg companies reported optimism, or semi-optimism, about the future.
Chocolatier Constance Popp’s Menzies is in that camp.
“We still want to be a place of delight for people,” she said. “I’m not going to let COVID, or lack of this or too much of that, or high prices get in my way.”
The Canadian Chamber of Commerce and Statistics Canada conducted their survey from July 4 through August 8, receiving responses from 17,013 Canadian companies (772 from Winnipeg’s metro area).
The survey was conducted electronically and doesn’t have an apparent margin of error.
Gabby is a big fan of people, writing and learning. She graduated from Red River College’s Creative Communications program in the spring of 2020.
Updated on Friday, September 23, 2022 8:23 AM CDT: Corrects wording, corrects reference to Kathleen Cook, the CFIB’s director of provincial affairs for Manitoba