Good morning.
Inflation is fuelling anger, fear and helplessness among Canadians and they’re responding to it through fight, flight or just freezing, according to a new study by Empathy Inc.
The study found that 73 per cent feel some type of indignation about the current inflation cycle, although the level of frustration varies based on their financial situation. Those who feel financially comfortable are typically just annoyed, while 55 per cent feel frustrated.
Fear was the second-most common reaction (59 per cent) to inflation, and that was heightened among those who do not consider themselves financially stable. Canadians who believe their basic needs are not being met say inflation makes them nervous, afraid and insecure. But those feelings dissipate as soon as people feel financially stable, and even more so when they are financially comfortable.
More than half of the 200 Canadians surveyed are also feeling hopeless because they are unsure what to do. Even those who are financially stable feel the economic situation is out of their control and are not able to escape this feeling of hopelessness.
The report said our first instinct when coping with inflation is “flight,” or cutting living costs, with 35 per cent indicating their primary response is to reduce overall spending.
“Canadians who feel precarious about their finances are more likely to reduce spending across all essential categories, such as food, health care and clothing, compared to those who feel financially comfortable,” the report said.
Most Canadians are also now more price sensitive, with 87 per cent on the lookout for cheaper products and services. Canadians indicated they are most price conscious about food and groceries (79 per cent), followed by utilities (49 per cent) and vehicle ownership (47 per cent).
“Food prices are felt more immediately and concretely; in a world where most expenses are automated through pre-payments and credit cards, grocery buying remains as a tactile and active spending experience,” the report said. “We feel a bit apprehensive as we pile items onto the belt; we notice the big total as we pull out our card.”
Another round of price hikes are expected to hit grocery stores in February when the annual holiday season blackout on cost increases comes to an end, Metro Inc. chief executive Eric La Flèche told the Financial Post’s Jake Edmiston this week.
Many Canadians also plan to fight to make more money as a way of dealing with inflation, with 46 per cent agreeing that “I’ll just have to find a way to make more money because of inflation.”
On the other hand, 19 per cent feel frozen, or powerless to do anything, with slightly more millennials and gen-Zers feeling that way.
“They are at the life stage with the most obligations, carrying financial anchors such as a mortgage, children and demanding careers that limit their choices,” the report said. “All these result in risk aversion and inaction during a crisis.”
