As the cost of everything rises in PEI, the province with the highest inflation rate in the country for the 20th consecutive month, consumers are spending less at local businesses, especially on non-essential items.
The Summerside and Charlottetown area chambers of commerce say they are hearing from members that spending is down and it comes at a time when businesses are also grappling with rising costs.
Kaley O’Brien, executive director of the Summerside Chamber of Commerce, said the costs of essential purchases make people spend less on other things.
“Community spending just doesn’t exist right now, because people are concerned and are being more conservative with their money,” O’Brien said.
Bill DeBlois is the president of the Greater Charlottetown Chamber of Commerce, as well as the owner of Buns & Things Bakery and Deli. He said it’s a difficult time for both businesses and consumers.
“People are definitely more cautious about where they spend their money,” DeBlois said.
Stressful situation for everyone.
Buns & Things Bakery and Deli has been a family-owned business for more than three decades, but DeBlois said this is the first time he’s seen such a “staggering” cost increase.
“Some of our top items could be up as much as 50 or 60 percent from last year.”
He said this adds stress to companies trying to avoid increasing costs for their customers.
DeBlois said his business has also seen a decline in profit. At the bakery level, bread sales remain relatively strong, but he said cake and cookie sales are down.
“That has definitely created a difficult atmosphere and that’s not unique to us, it’s difficult for any and all small businesses trying to function.”
O’Brien said businesses that sell luxury items, higher-priced clothing or knick-knacks are especially struggling because those items are often the first to go when people cut back on spending.
“We are definitely going to see a reduction in spending this holiday season,” he said.
Cut before the holidays
Shirley Smith of Donaldston, PEI, said she’s cutting back on holiday gifts this year, relying heavily on handing out pretty Christmas cards instead.
“I don’t want to spend a lot of money because I have to replace the roof on my house and I have to cut back overall,” he said.
Smith said he’s seen items nearly double in price over the last year and feels sorry for businesses that might be seeing fewer customers.
For Mary Beth Campbell, owner of Luxury Market Consignment, offering a variety of prices is one way to keep customers satisfied. Campbell said her consignment store has a rack of $10 deals and she’s aware of how rising prices could change shopping habits.
“When people are tighter for money, we bring in pieces that aren’t as expensive,” he said.
Campbell said she has noticed many people bring their items to the consignment store hoping to earn some extra cash.
And while Campbell said she’s concerned about how rising costs could mean people are buying less, she’s trying not to stress too much.
“I mean it’s scary for everyone, but unfortunately everyone is going through the same thing.”