Cineplex Could Raise Prices And Lay Off Employees In Response To Minimum Wage Hike
CEO Ellis Jacob is looking for solutions to offset the new minimum wage.
Tim Hortons isn’t the only company experiencing the dire effects of the recent increase in minimum wage in Ontario. Cineplex is also affected by the changes, and it’s currently evaluating options to offset the pressures of the upcoming wage hikes.
Cineplex CEO Ellis Jacob was vocal about his disapproval of the minimum wage changes in a recent interview with BNN.
“It’s sad to see what’s happening, because at the end of the day in a lot of cases, we are the first job for a lot of individuals we hire,” he said. “A lot of the times when I’m in presentations and meetings, there are half a dozen CEOs and four out of six of them worked in a movie theatre or at a Cineplex.”
Cineplex also reported profit miss for the second quarter, which further adds to the growing financial pressure. Jacob said that his company is looking at three options to offset any costs from the upcoming minimum wage hikes.
“We are focusing on three areas: one is efficiency, two is technology and three is pricing to see how we get into that balance,” he said.
This could mean that if Cineplex really starts to struggle financially, it may look at raising ticket and concession prices, and even start replacing hourly employees with technology and automation to balance everything out.
Back in 2016, Cineplex already implemented a raise in ticket prices (between a 22- and 51-cent increase) after minimum wage went up. Such was almost essential as almost 90% of its employees earn minimum wage.
Cineplex has made its concerns aware to the Retail Council of Canada, as the new changes will undoubtedly have a significant “ripple effect” on the company and many others.