Retailers are cutting prices to win your business. Here’s where you can save – National

Canadians with extra spending cash right now might find they can score deals on clothing, some discretionary items and higher-ticket purchases as experts say retailers are fighting harder for consumers’ dollars.

February’s inflation report released Tuesday shows that not only is the pace of price hikes cooling across a range of household expenses, but some products are even seeing costs decline year over year, offering consumers much-needed relief in some categories.

The clothing and footwear component of Statistics Canada’s consumer price index saw a 4.2 per cent decline year over year last month, steeper than the 1.3 per cent drop seen in January. The section including household furnishings also saw annual price declines accelerate in February.

Click to play video: 'Canada’s inflation rate slowed to 2.8% in February, beating expectations for 2nd consecutive month'

Canada’s inflation rate slowed to 2.8% in February, beating expectations for 2nd consecutive month

Shelly Kaushik, economist with BMO, said in a note to clients on Wednesday that “it’s clear prices for discretionary goods are falling” in Canada.

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She highlighted that jewelry prices saw the biggest drop on record in non-seasonally adjusted terms last month. While she noted that an increase in the supply of lab-grown diamonds or alternative stones could have driven prices lower for sweethearts shopping over Valentine’s Day, the simpler explanation is that the Bank of Canada’s interest rate hikes are working well to tamp down price pressures in this area.

“Consumers are pulling back on non-essential items amid elevated rates, pushing the prices of those items down. Monetary policy in action,” she said.

Retail analyst Bruce Winder tells Global News the softening economy is indeed hampering consumer spending demand, which is forcing many retailers to drop prices to make sales.

“There is discounting that’s happening right now, because retail is all about supply and demand,” he says.

Discretionary items like jewelry and clothing and higher-ticket durable goods like electronics, furniture and appliances are “softer right now” because higher interest rates are forcing households to spend more on shelter costs, Winder says.

While food inflation cooled significantly in February, the cumulative impact of price hikes over the past few years means grocery bills are still eating up a big chunk of Canadians’ budgets, he adds.

“It’s still expensive out there. So consumers have had to make trade-offs,” he says.

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And retailers are taking notice of their cash-strapped customers.

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Here’s how going viral impacts small businesses


The Lexington Candy Shop in New York City has served burgers, fries and shakes to hungry patrons for decades. Last remodelled in 1948, the diner is the definition of old-fashioned.

But that hasn’t stopped it from getting a wave of new fans.

In August 2022, this old school business met the new world when Nicolas Heller, a TikToker and Instagrammer with 1.2 million followers known as New York Nico, popped in for a traditional Coke float — Coke syrup, soda water and ice cream. Naturally, he took a video. It went viral, garnering 4.8 million likes.

“The next day (after the video was posted), the lines started forming at 8 in the morning,” John Philis, the diner’s third-generation co-owner, recalls with amazement. “And it was like, huh!”

When a smaller restaurant unexpectedly goes viral on TikTok or other social media, the sudden demand can be overwhelming. Owners have to adapt on the fly, revamping operations to quickly serve a crush of people. But savvy business owners who are able to adapt can parlay newfound fame into a lasting boost for their business.

Ali Elreda opened Fatima’s Grill in Downey, California, in 2016, drawing in customers with an eclectic range of tacos, wraps and burgers.

He sprinkled Flamin’ Hot Cheetos in some of them, inspired by his daughter’s love of hot chips. By 2020, Elreda had worked hard to develop his restaurant’s social media presence, shooting videos with music. But after a TikToker dubbed @misohungry posted a video of Elreda’s Flaming Hot Cheeto Fusion burger that August, things suddenly “just went crazy.”

Dominique Ansel, second from right, greets people who have been waiting in line for the opening of his namesake bakery in New York, Thursday, Sept. 28, 2023. In 2013, before most people knew the term “going viral,” the French pastry chef created the Cronut, a cross between a croissant and a doughnut, at his newly opened New York bakery. (AP Photo/Seth Wenig)

Lines to get into the restaurant ballooned to two to three hours — for months. At first, the store wasn’t ready for the influx.

“We just couldn’t adjust,” he said. “We would stay late hours to prep for the next day and then the lines would continue and continue and continue and continue.”

Opening two nearby restaurants helped relieve the pressure. Elreda now has 10 locations, including newly opened restaurants in Detroit and Brooklyn

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