Timmins businesses struggle to balance prices vs. profits amidst high inflation
Balancing profits and customer affordability is an age-old challenge for a small business, but high inflation is making it especially difficult.
Timmins-based Aline's Tea Shop is feeling the pain of the current 7.7 per cent rate of inflation -- the highest in about 40 years – and is trying to keep prices reasonable by compromising on profit margins.
Still, owner Claudette Lambert said her costs have gone up and while the store saw a surprise spike in patronage during the pandemic, sales are now at their lowest in years.
"The food prices, the fuel. I mean, when you think about it, everything has gone up so much," Lambert said of why prices at her store are higher and possibly keeping some customers away.
"This has been going on now for about three weeks."
But higher prices don't necessarily mean higher profits on her end. Lambert said if she priced her products to achieve profit margins of previous years, she would likely drive away far more of her clientele.
It's a similar challenge at local electronics repair store Nick's Phone Repairs, according to owner Nicholas Peever.
Peever has a five-year plan to keep his prices as stable as he can, but said inflation has not made it easy.
The parts needed to repair new devices are more expensive than usual, he said, while older models are still affordable to repair.
The struggle is trying not to punish clients for the extra costs, who are likely struggling themselves with the impacts of inflation elsewhere.
"I'm always trying to be reasonable with that and just kind of be competitive with my prices," Peever said.
"You try to make it worth it. What I do is just try to make sure that the experience with the customers is great."
The Timmins Chamber of Commerce suggested in an email that it might be time to revive the "support local" mentality that saw a heavy focus during the pandemic.
Chamber president Rob Knox said while northern Ontario industries tend to insulate communities from economic hits, inflation is a widespread concern.
"More than 500 of our 625 members are true small businesses, employing less than 30 employees and trying their best to keep people employed," Knox said in a statement.
"We’re not immune, however, to the rising inflationary rates, the likes of which we have not seen in 40 years … This is why we must continue to find what we need in Timmins and now, more than ever, support our local businesses.”
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