Canada’s annual inflation rate hit a 30-year high in January, which in a pre-pandemic world likely would have pushed consumers to start cutting non-essential spending — but the past two years have some reconsidering what’s a necessity.
Gayla Cameron, a third-year engineering student at the University of Prince Edward Island, says getting her nails done has become a key piece of caring for her mental health.
“[It’s] just something I do every month that is like the one self-care thing that I do for myself, so I always do it. It’s not that big of an expense compared to everything else I have,” she said.
“For 50 bucks a month, if it makes me feel good for the rest of the month, I think that’s worth it … especially when I spend so much of my time stressed out about school.”
Cameron said she’s already cut most of her non-essential spending over the past two years. So true necessities such as food, rent and gas would have to increase drastically before she’d give up her manicures.
“I think, honestly, with COVID there are other things that have been cut out of my budget,” she said.
“I don’t really go out to bars. I haven’t been to a restaurant since December — so those kinds of expenses have gone away naturally.”
‘Treat yourself’
Inflation is forecast to hit new highs by the end of the year. That’s combined with soaring gas prices and skyrocketing food and housing costs — all of which have been exacerbated by the COVID-19 pandemic.
Tarek Mady, the dean of the faculty of business at the University of Prince Edward Island and an associate professor of marketing, says rising prices would historically leave consumers cutting back to just the necessities.
But he believes the pandemic has changed things.
“One of the things that I would always tell companies is that the shifting of what is essential or not differs on the circumstance, differs based on a lot of different situations,” he said.
“The pandemic itself has shifted our perception of what’s essential and what’s not essential.”
Take going to see a movie in the theatre. Some people, Mady says, would say spending $20 on popcorn is an essential part of the experience even though they wouldn’t pay that much for popcorn in any other circumstance.
“[There’s] a feeling that we’ve been through a lot.… And we’re seeing this with the evidence, with a record-high number of travel bookings and so forth, where people are looking at travel, at the moment, as an essential part,” he said.
“So if you’re a company that aligns to these types of products, it’s actually good business for you to sell that emotional, ‘treat yourself’ kind of model.”
‘A crazy two years’
Mike Ross, one of the owners at Hopyard — a craft beer bar and restaurant in downtown Charlottetown — says customers are eager to eat out again as pandemic restrictions ease.
“People are just non-stop talking about how much they enjoy things getting normal again,” he said.
“There’s an end. Whether it’s in sight yet, who knows? But I think what we’ve done the last two years has prepared us for what’s coming. I think there’ll be no pain that’s as bad as the last two years for the restaurant business, so we’ll persevere.”
Ross says food costs are already going up, but the restaurant is still the busiest it’s been in two years.
“This is just another roadblock and we’ve gotten pretty good at getting over roadblocks…. It’s been a crazy two years, so it’s not like we’re walking into this blind,” he said.
“After two years of what we’ve been through, I think if you talk about essential spending, getting out and socializing has become essential.”
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