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The recent minimum wage increase in Ontario has been impacting many small and medium businesses, but large companies like Tim Hortons have also been taking measures to adjust to the wage changes. The next company confessing struggles with the cost is Cineplex.
The large theatre chain had a challenging fourth quarter with disappointing sales through the end of December. Star Wars: The Last Jedi was seen as the companies only hope for high sales at the end of 2017 but, failed to save the year. A look ahead at 2018 has just the second quarter as a promising turn over with features like Avengers: Infinity War, Incredibles 2, and Solo: A Star Wars Story due to come out in the spring.
The significant minimum wage increase will have an undeniable impact on Cineplex as 90% of their employees currently make minimum wage. Mixed with the low sales, it has created a perfect storm that the company needs to start problem-solving.
The Bank of Canada has recommended that the theatre company “look to prices” as an option for growth. Cineplex is now considering options of raising ticket and concession prices or launching a premium seating program for reserved seating of the middle two rows.