Inflation, interest rates push small businesses to hike prices as holiday season hits

Canada's small businesses are feeling the pressure to raise prices as inflation and higher interest rates affect their bottom lines heading into the holidays.

With the holiday season ramping up, it’s a critical time of year for small businesses.

But for retailers like Calgary’s UTB Fashions — facing the pressures of inflation, higher interest rates and a possible recession on the horizon — the walls seem to be closing in at just the wrong time.

Ursula Wegen, who owns and runs the shop with daughter Kris Scholes, says they’re now being forced to make impossible decisions on pricing to compete with big-name retailers while leaving enough on the table to make it to 2023.

Next year will mark two decades in business for UTB, which started as general clothier Under The Bridge, but has evolved to sell gifts made by local Calgary artisans and “unique” fashions for women and children.

“Timeless, good quality for a decent price. That’s what we’ve always been about,” Wegen says.

But while the store has been able to keep its prices steady for much of 2022, the pressure is ramping up this fall with costs from suppliers rising as much as 25 per cent, she says.

Other operating costs for UTB have gone up as well.

“Everything from the insurance to the security to the cost of us even getting here like, your gas tank. It costs me $10 a day just to get to work where before, that was minimal,” Wegen says.