Warm Hearts And Empty Wallets
The Saturday Huddle is a weekly column that features opinion, analysis, and reflections on Huddle stories, podcasts, and business news in the region. Derek Montague is a Huddle reporter based in Halifax.
It seems like we get more cynical as we get older. Is that too broad of a statement? Am I generalizing too much? Perhaps, but I remember a time when, despite constantly being a bachelor, I celebrated Valentine’s Day every year.
When I was 15, I used Valentine’s Day as an excuse to take a girl on my first-ever date. I went all out with flowers and a not-so-romantic dinner at Pizza Delight. From then on, I would spend money most Valentine’s, even if it was just cards and small gifts for lady friends.
In college, there was a candy-gram fundraiser on Valentine’s Day. I must have spent $20 or more to make sure every young woman I knew in that school got one. I don’t know why I spent so much money in my youth on this “holiday,” being single and all, I think I just got some joy out of making friends feel special.
The last time I remember making a fuss over this holiday was more than a decade ago, in one of my final semesters at St. Thomas University. A friend of mine gave heavy hints she was looking for a date, so I ended up asking her.
By that time, my cynicism must have been setting in. I did pay for the lunch but forgot to bring flowers. I remember asking a server if they would sell me some of the many flowers they had before my date arrived. My memory is fuzzy from there, but I’m guessing they rejected my offer.
From there, my heart shrunk to a Grinch-level size and I stopped spending on the holiday. I did buy someone a card, way back in 2019, but I don’t think that was much help to the economy.
Despite my decade or more of being cynical about Valentine’s Day, I’m encouraging people to do the opposite this year. A lot of businesses could use the boost.
We are still in the midst of winter, a time when, even without inflation and higher mortgages, people tend to spend less. For many small businesses, especially in the restaurant industry, Valentine’s Day is a needed boon.
Based on recent statistics, this year’s Valentine’s Day may be the most important yet from an economic standpoint. Restaurants Canada released a survey in November that shows declining sales in the food-service industry.
“Taking into account menu inflation, November 2022 real commercial foodservice sales were 4.7 percent lower across Canada compared to the same period in 2019, representing the most significant monthly decline in foodservice spending since March 2022,” the report reads.
“The share of Canadians who purchased dinner from a restaurant once a week or more fell to 26 percent in November 2022, a noticeable decrease in traffic after consistently averaging 33 percent over the previous eight months.”
The survey, to no one’s shock, found a direct correlation between menu inflation and declining sales. Quebec saw the biggest decrease. It was down 9.2 percent in sales, which almost perfectly corresponds with the province’s 9.6 percent increase in menu prices.
This is the sad, unfair, dilemma restaurant owners face. Their ingredients are now more expensive, just like our food at the grocery store, thanks to historic inflation. But we can’t stop going to the grocery store, so grocery store giants can keep passing on inflationary pressures to the customer. But going to a restaurant is a luxury; if it gets too expensive, consumers will just cook at home.
It forces restaurant owners to try and cut costs to keep their customers.
According to Restaurants Canada, New Brunswick’s restaurant sales were down five percent — slightly worse than the national average of 4.7 percent. Nova Scotia is a bright spot, with sales up 3.5 percent.
It’s not just the independent restaurant owners who are struggling in this strange new world. Small business owners in general are feeling the crunch.
A CFIB survey conducted towards the end of 2022 found that small business owners are still carrying six figures worth of pandemic debt. Meanwhile, 50 percent of these operators are still experiencing “below normal” sales.
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Worst of all, in New Brunswick and Nova Scotia, 15 percent of these businesses are at risk of closing down.
The lack of sales at small businesses is a combination of people spending less due to inflation, higher interest rates, and more people shopping online since the pandemic started.
So all the evidence points to this Valentine’s Day being an important one to help buoy our struggling businesses. But evidence suggests this year may be more low-key.
One news outlet reports that Canadians will spend just $62 on average this year on Valentine’s. In 2019, that number was $92.
Believe it or not, despite my heartbreaking record of barely spending a cent on this holiday over the past decade, I’m encouraging all of you, whether single or in a relationship, to spend money this year on February 14.
Go to a local, independent gift shop in your hometown and buy a gift. Then, find the most romantic restaurant in your area. Buy the wine, the three-course meal, and finish off with dessert.
It feels good to make someone else feel special, even if it’s just a friend. And, right now, the businesses you love most could really use it too.