As inflation continues to climb year over year, small businesses in Toronto say they are feeling the strain. While major sporting events like the FIFA World Cup can help boost revenue, business owners say they also highlight the underlying cost pressures facing the sector.
A new report from Statistics Canada shows the annual inflation rate rose 3.2 per cent year-over-year in May, underscoring continued price pressures across the economy.
Those pressures are being felt on the ground by small business owners, according to a new Merchant Growth survey, which found that one in four small businesses in Ontario have raised prices in response to rising costs.
Costs continue to rise
The survey also identified the top cost challenges heading into the summer: weak consumer spending (45 per cent), fuel costs (39 per cent), utility bills (39 per cent), labour costs (34 per cent), and commercial rent increases (28 per cent).
For Cesar Mesen, owner of Toronto sports bar The Pint Public House, inflation has been increasingly difficult to absorb, particularly amid rising global tensions and energy costs.
“Oil is getting more expensive, and with oil getting more expensive, everything gets more expensive, from produce to transportation,” he said in an interview with Now Toronto.
He added that hiring costs, rent, taxes, and liquor expenses have all increased, forcing the business to raise prices selectively when necessary.
“When the economy is bad, people tend to cut back on entertainment and dining out. So we need to be very careful and very strategic, protecting the business while also making sure guests don’t feel uncomfortable or unwelcome,” he said.
World Cup crowds bring opportunities — and new expenses
Mesen noted that the FIFA World Cup has brought increased foot traffic to his business, boosting revenue in recent weeks. However, he said major events can also create additional financial strain for operators already working on thin margins.
“You also have to hire more people, carry more inventory for certain games, and stay open longer hours. Yes, there’s more revenue and cash flow, but costs also go up,” he said.
Despite the added pressures, Mesen said he welcomes the surge in business and would “have the World Cup in the city every year” if possible. Still, he cautioned that operators must remain disciplined with spending.
A busy summer ahead
Toronto is expected to welcome millions of visitors this summer as World Cup festivities continue alongside major concerts, cultural events and seasonal attractions.
For businesses, that activity offers a welcome boost after years of economic uncertainty.
Still, Mesen says operators can’t afford to get carried away.
“We need to make sure we’re not spending just because it’s the World Cup or summer,” he said. “We have to be smart about procurement and purchasing.”
While he jokes that he’d happily host the World Cup in Toronto every year, the reality facing many small businesses remains unchanged: even when sales increase, rising costs can quickly erase the gains.
As inflation remains elevated and operating expenses continue to climb, many Toronto businesses are hoping a strong summer season will provide at least some relief.
