In a recent report, Scotiabank economist Derek Holt concluded the latest Canadian retail sales data “probably told us nothing about the state of the Canadian consumer.”
Luckily, we have Marty Weintraub on next week’s episode of Free Lunch By The Peak to dive into what’s happening in retail, like why prices are rising and when they’ll stop.
Will the cost of things we buy continue to rise?
“The consumer is pretty much done with price increases, but that doesn't mean they’re over. In food, it is going to be super hard because there's very little control over those inputs on costs. But in apparel, fashion, and general merchandise, there are options to trade down products to private labels or store brands. It is painful right now, but it will come and go.”
Will automation help bring prices down?
“Retailers can only push a vendor so much before the quality falls to a point where no one's gonna buy, right? So retailers are trying to control the costs they can, like labour. You'll start seeing more digitization in stores. It may shock you, but changing price tags is one of the highest labour tasks after running a register. Digital price tags eliminate that overnight.”
Is inflation being driven by opportunistic price hikes?
“Companies, like humans, can be opportunistic. But do I think it’s the predominant force behind price hikes? No. We operate in a pretty transparent environment. You can't really pull the wool over consumers’ heads today like you probably could 20 years ago. I like assuming positive intent. For the most part, it really is driven by supply, demand, and economics.”
This interview has been edited for clarity and length. To catch the full episode with Marty on Tuesday, subscribe to Free Lunch by The Peak wherever you listen to podcasts.