Small businesses struggling to recover from lockdowns, soaring inflation

Ballooning inflation is pounding small businesses still struggling to recover from pandemic lockdowns, and according to a new report confidence is at all-time low even with the holiday shopping season just around the corner.

“If you look around Queen Street West it’s shocking how many businesses have gone out, I have another store at Yonge and Eglinton and it’s shocking how many are out of business,” Janet Wright, owner of Floor Play Socks, tells CityNews.

Wright adds she is preparing to hire her holiday staff but worries it will be a scaled back season.

“I am 100 per cent worried, even me – mother of four grown children – everyone’s going to be getting less for Christmas,” she explains. “I can’t see people spending what they used to spend before COVID because people just don’t have the disposable income anymore.”

According the Canadian Federation of Independent Business (CFIB), confidence levels among business owners are the lowest in Ontario compared to any other province, and the retail sector is preparing for the biggest hit during what is normally the most lucrative time of year.

“As a product moves along the supply chain to get to the business owner, the costs keep increasing,” says Julie Kwiecinski, the CFIB’s Director of Provincial Affairs for Ontario.

“And then the business owner says to themself ‘okay, I’ve got this additional cost what do I do?’ Because if you are a retailer going into the holiday shopping season this could be you’re make it or break it season. And you hearing that consumers are squirreling away their acorns, they’re not going to be spending as much and that’s going to impact you with lower sales.”

The CFIB reports 59 per cent of businesses across the province are still making less than normal revenues while 42 per cent have yet to pay off a penny of the average COVID debt of $130,000, and 18 per cent are “actively considering bankruptcy or winding down their business.”

Wright says soaring inflation is putting added pressure on every aspect of keeping her sock shop on steady ground.

“It’s not just that I personally want to do well, it’s that I employ a lot of people who also have rent to pay, I employee people who also have children to feed, and who want to have their own Christmas,” she says.

“We are wondering where are we going to be in Ontario with retail come February or March,” adds Kwiecinski. “Will we still have those local mom and pop shops in the neighbourhood.”

November 26th is Small Businesses Saturday in Ontario – a day where residents are encouraged to kick off their holiday shopping in their own neighborhood. The CFIB says for a mom and pop shop every transaction could makes a big difference.