Small businesses in southern Alberta continue to deal with the financial fallout of the pandemic, and now they’re dealing with the added pressures of inflation.
“We have actually less customers this summer than compared to the summer when we had COVID, and that directly is inflation,” said Ram Khanal, owner of the Water Tower Grill and Bar.
Rising costs have put owners like Khanal in a tricky spot — far fewer customers are walking through the doors of his three Lethbridge-area restaurants, meaning less cash to offset the climbing prices he has to cover just to stay up and running.
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“We’re considered a luxury product, because eating out is a luxury,” he said. “No one is going out to eat because they have not earned as much — there is not as much — disposable income.”
Khanal said he can’t download the entire weight of the increases onto his customers, for fear of making eating out even more inaccessible.
It’s a balancing act that the Lethbridge Chamber of Commerce has seen many businesses struggling with.
“With inflation going up, interest rates going up, the cost of business is going up and up and up,” said CEO Cyndi Bester. “It’s challenging right now to kind of set some of those target bases without knowing when is that going to stop?”
And if inflation wasn’t enough, add staffing shortages to the list of hurdles businesses are trying to juggle.
“It has been very difficult to find staff,” Khanal said. “Especially in Lethbridge, because we heavily rely on the university and college, and the last two years we didn’t have [students] here.”
Economic Development Lethbridge CEO Trevor Lewington said the hope is that the city will see an influx of young workers when the school year begins in September.
“The university in particular in Lethbridge is a bit of a destination university, so about 70 per cent of the students attending the university come from somewhere else other than this region. So it’s really an important source of labour for the local market, particularly restaurants and some of those front-line service jobs,” Lewington said.
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“It will be interesting this fall — as classes resume — what that mix of online versus in-person looks like, and how that impacts the labour force.”
The current situation in the job market has also put prospective employees in the driver’s seat.
“It’s very much a job seeker’s market at this point,” Lewington said, adding that there’s roughly 5,000 job vacancies in the Lethbridge area currently.
“The average wage rate for those vacancies is in and around $21.50 an hour, so well beyond the minimum wage.”
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According to the Statistics Canada Labour Force Survey for July, average hourly wages were up 5.2 per cent year-over-year last month — another increase that’s sure to have business owners looking for other ways to cut costs as inflation continues to soar.
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