A pandemic that slammed a vital part of the Canadian economy, the retail sector, through lockdowns and temporary closures, is being hit again through higher costs on everything from supply chain snags, higher shipping costs to climbing input costs. Prices have headed higher and consumers aren't happy about it.
Rising inflation is on the radar of consumers, economists and finally politicians.
Pandemic-related cost increases, coupled with supply and demand imbalances, are pushing inflation higher and weighing on retailers’ efforts to turn things around. Adding to the challenges: consumers, who in many cases prior to the pandemic worked feverishly to spend until it hurt (often resulting in higher consumer debt levels that were not sustainable), may now be wondering why so much time and money was spent in an effort to keep up with the Joneses.
The pandemic has shown what matters most and it isn't more stuff.
As the economy opens up, consumers are changing, and expect more for less. Our spending habits prior to the pandemic were out of control and now seem to be shifting to a more minimalist set of values. I have to wonder if retailers have acknowledged how the landscape has changed and recognize the pandemic may have changed us – financially speaking.
I reached out on social media to get a feel for how, if at all, we have changed our spending patterns. The response was rapid and focused. Families are looking for ways to pull back spending, and stretch their dollars further.
A common theme is developing: we don't need more stuff, we just need to use the stuff we have. Some have told me they have implemented a self-imposed moratorium on spending, adopting a more relaxed approach to retail therapy and now wonder why keeping up with the Joneses was so important to them in the first place.
Now, to be fair, this doesn't mean we won't spend -- because we will. There is still pent-up demand for goods and services. However, based on feedback I have received, we will be a lot more discerning about how and where we spend. Spending on life essentials, such as food and paying bills on time, is front and centre as costs have gone higher.
One retailer who reached out to me is trying to adapt to today’s environment and has found people want comfy clothes because the pandemic has altered their lifestyle in many ways. As a small business owner they acknowledge prices are higher because shipping costs from overseas have gone through the roof. However, they still truly believe this is a time to reward loyal customers by not drastically increasing prices because we are all in this together.
However, the burden can't be on the retailers alone.
Something has to change. Either prices come down or our discretionary income goes up and then people may find a reason to spend.
I hope the politicians are listening, retailers need help and our economic recovery may depend on it.