A story on the Globe website this week caught my eye because it may signal the beginning of a consumer backlash against the rising cost of living.
Cinema chain Cineplex CGX-T has announced a $1.50 reservation fee for ticket purchases made online and through its mobile app. This goes against all the rules of internet economics, which is that you get a price break for not exhausting the company’s time and space. But the response to Cineplex’s price hike suggests a broader anger. People are tired of high prices.
Our story about Cineplex was one of the most widely read stories on our website that day, and it generated a lot of comments. There was also a lively discussion about advertising on the topic of personal finance in Canada for this online Reddit forum. I haven’t seen much acknowledgment of closing Cineplex theaters during pandemic shutdowns, and that COVID has hit a few sectors harder. Instead, people sniped at price increases from all directions.
Cineplex Adds $1.50 Booking Fee To Online Ticket Purchase To ‘More Investment’ In Digital Infrastructure
Angry comments online are pretty standard these days. But Cineplex’s price increase seems to be more than its weight in attracting readers. Isn’t the biggest expense in the cinema related to the total volume and the cost of snacks?
Statistics Canada said this week that the cost of living in May jumped 7.7 percent, the highest annual rate since the fabled days of inflation in the early 1980s. We are embroiled in a wave of price increases driven partly by weak supply lines and partly by rising demand from households who have hoarded cash in the pandemic and are eager to spend on certain goods and experiences such as travel.
One of the things we need to see for inflation to subside is the consumer’s lack of willingness to pay today’s high and rising prices. The latest consumer spending tracker report from RBC Economics said we are still buying more than we were before the pandemic, but there are signs that spending is stabilizing.
The loss of momentum in spending can be described as depletion from inflation, but there is an element of backlash as well. Companies seen as part of the inflation problem can be penalized, a point made by David Colito, CEO of Abacus Data at tweet This week in reference to the youth. “If you’re under 40, inflation is a whole new phenomenon…every sector, brand, and organization needs to understand that.”
Companies like Cineplex are in trouble — they may have struggled during the pandemic, or they may face rising input costs. The costs have to be passed on to some extent to the customers, who have so far been willing to pay. The inevitable backlash may have begun this week.
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Rob’s Personal Finance Reading List
How to build an emergency fund if you are in debt
Practical ideas on how to build a financial reserve, even if you are incurring some debt. The necessary financial supplement in the second half of 2022 is the Plan B Contingency Fund.
Protecting retirees from inflation
A look at how financial planners and investment advisors are managing portfolios of retired clients to reduce the impact of inflation.
Fight inflation by delaying the cost of a phone call
An investment advisor on how to delay the start of retirement benefits for a Canadian pension plan until age 70 can help you deal with inflation. Delaying benefits is also a powerful way to help ensure that you don’t overrun your retirement savings.
Can you get life insurance if you have coronavirus?
Yes, but there will likely be a waiting period after your COVID episode has resolved.
ask rob
s: The market value of my RRSP portfolio of mutual funds has been decreasing over the past few months due to market volatility. If I were to switch to another RRSP product, I would definitely lose. Would you advise just to continue down the path and hope the market rebounds to a more positive outlook?
a: The real question is how your money has performed over the past three to five years, including the March 2020 stock market crash and the subsequent massive bounce. Getting in and out of money based on short-term results is a good way to lock in losses and miss out on upcoming gains. By the way, even wallets that follow the classic rules of diversification have been hit hard this year. You are far from alone in seeing dips in your RRSP.
Do you have a question for me? Send it my way. Sorry I can’t answer each one personally. Questions and answers are edited for length and clarity.
Today’s Financial Instrument
A publication for advisors addresses the question of whether assets held in registered retirement savings plans are protected if they go bankrupt.
Money Free Zone
River of Man by jazz singer Andy Bay is a hypnotic version of Nick Drake’s Folky song. It was also covered, in cute form, by an alternative German band called Science Fiction.
Tweet of the week
The financial planner begs the question of what you would do if you had $10000 to invest Immediately.
In case you missed these personal finance stories for Globe and Mail
– The story of the Koch caliphate to learn from
– How to sell the family cottage without disturbing the children
Teaching children the truth about economics
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