Small businesses in Canada missed over $38 billion in revenue opportunities last year because they had to turn down or postpone contracts or sales due to labour shortages, finds a new report by the Canadian Federation of Independent Business (CFIB).
Laure-Anna Bomal
“We always knew labour shortages came at a high price to small businesses. Staffing challenges cause employers to work more hours, reduce their hours of operation and decline services and contracts, simply because they can’t find enough staff to fully operate their business,” said Laure-Anna Bomal, CFIB’s economist and the report’s author.
“In fact, we estimate the business opportunities that small businesses lost in just one year due to labour shortages are worth over $38 billion. While it doesn’t necessarily mean the Canadian economy lost the same amount, it’s still a significant share of revenue that small businesses could have used to invest in automation or growing their business.”
Small Businesses in Canada Hit Hard: The Big Financial Toll of Labour Shortages
The CFIB said small businesses in the construction sector faced the most significant loss of business opportunities, over $9.6 billion in the last year.
A single policy change will not address these labour shortage pressures, but a collection of them might provide some relief. After a detailed review of what other jurisdictions are doing to address their labour shortages, CFIB has completed a whitepaper on how to address various barriers to work, it said.
The policy proposals cover three age groups—youth (15-24), core age (24-64), and older workers (65+)—and include targeted solutions on how to better integrate workers of all ages into the labour force.
Christina Santini
“As Canada’s population is aging, we need to ensure that those who are willing to work can do so without significant challenges. In the long run, the shortages will get worse, as will their costs, unless we change our labour market approach,” said Christina Santini, Director of National Affairs at CFIB. “We urge governments to find innovative ways to increase participation in the labour market among all age groups.”
For example, to increase workforce participation among youth, governments could increase the prevalence of work-integrated learning in high schools. Among the core-age group, employment insurance program design shouldn’t create disincentives to work, and governments need to facilitate labour mobility across provinces. As for experienced workers, governments should revisit existing tax policy and/or create a tax credit for career extension, said the CFIB.
In this video interview, Santini talks about the economic impact of the labour shortages, why it’s happening, what to expect in the future, what industries are being impacted the most and what government needs to do to help.
The Video Interview Series by Retail Insider is available on YouTube.
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Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
The social and financial costs of policing food theft are higher than the costs of addressing poverty and income inequality. (Shutterstock)
Big businesses like to tell us that, as consumers, we all pay for food theft. We’ve been sold a narrative that as consumers who don’t steal, we pay for the theft of food by others on our grocery receipts.
Retailers would have us believe that the cost of food theft is limited to retailers passing on their losses to consumers. However, retailer investment in surveillance, security and special duty police officers are costs that are also passed on to consumers: we pay for the surveillance systems that surround us.
The social cost of policing food is much higher, and deeply concerning because it produces unequal community impacts.
Food theft
Food theft is framed as a threat to paying customers. That furthers the divide between those who can still afford groceries, and those who cannot. Media coverage of food theft often focuses on exceptional examples of theft to emphasize that the crisis is an issue of worsening crime. But that framing ignores the broader economic conditions that perpetuate the problem.
Reported increases in food theft in Canada have been linked to pressures from rising inflation and diminished investment in social supports. (Shutterstock)
When food theft is disconnected from social conditions, it also collectively distracts us from the underlying issue of rising food costs.
Buying into the food theft moral panic, divorced from its broader social conditions, has resulted in increased surveillance, security and policing. Retailers and police rely on these extraordinary accounts of food theft to create moral panic to be managed through securitization and policing.
We are emerging from a global pandemic that severely impacted unemployment rates, as cities grapple with underfunded social services and inflated police budgets. In these contexts, thinking about food theft through a lens of criminality limits interventions and responses.
Project Stop Lifting is another initiative between the Winnipeg Police Service and Manitoba Justice, and in a two-month period in 2020 it led to 74 arrests and 592 total charges were laid.
These arrests and charges raise important concerns about how increased policing is being used as a purported solution to food theft.
Impacts on racialized people
Increased policing will disproportionately impact racialized and other marginalized people who are most vulnerable to over-policing and criminalization.
A charge for theft under $5,000 may not result in incarceration for some, but we know Indigenous and other racialized people are more likely to be arrested for minor offences. In Manitoba, Indigenous people are subject to overpolicing, racial profiling and over incarceration. Indigenous people represent 77 per cent of the provincially incarcerated population.
Research shows that increased policing of grocery stores and pilot programs to increase arrests will disproportionately impact Indigenous and racialized shoppers. This is disconcerting given the Truth and Reconciliation Commission’s Call to Action No. 30 which calls upon federal, provincial, and territorial governments to eliminate the overrepresentation of Indigenous people in custody. The cost of food theft does not justify the impacts of increased incarceration for Indigenous Peoples, as well as other racialized and marginalized people.
Manitoba Premier Wab Kinew has argued the province’s approach to cracking down on theft fails to address the root causes of crime, and that the underlying problems that lead to theft need to be addressed. Theft cannot be divorced from the social conditions that leave individuals with no other alternatives, especially for needs as basic as food.
The social cost of such measures is important to consider. Going through the justice system will compound financial distress, subject individuals to police violence, and if incarcerated, will disrupt lives.
The costs associated with policing food, and incarcerating those who find themselves in a position of needing to steal food, should be redirected to feed people. Calls to defund and abolish the police have argued for the reallocation of police budgets towards life-sustaining social services and non-carceral alternatives to address crime.
The redistribution of public spending would address people’s struggles to afford food and reduce the high social and fiscal cost of criminalization and policing. By contrast, directing funding to surveillance, security and policing in response to food theft will compound harms.
We have a serious problem if we would rather see people in prison than fed.
Flamborough Centre, 52-90 Dundas St. E. in Waterdown, ON. (Image: Colliers)
A new report by real estate firm Colliers Canada says open-air retail vacancy is expected to decline one to two per cent over the next two years.
“In the last three years, the overall retail vacancy rate has risen from 7.1 per cent to 7.5 per cent. This includes open-air retail, enclosed malls, and street-level retail. When isolated from other retail asset classes, however, open-air retail vacancy has steadily fallen from 6.6 per cent to 4.3 per cent. This includes strip malls, neighbourhood centres, and big box stores. The difference underscores the resilience and growing appeal of community-centric retail spaces for convenience and accessibility,” said the Open-Air Retail: Weathering Economic Headwinds report.
The report said necessity retail will continue to excel over the next two years, despite declining consumer confidence. Consumer confidence has declined eight percentage points in the last year. Declining consumer confidence leads to a decline in non-necessity, discretionary spending.
“Necessity retailers – the largest percentage of open-air retail tenants – are better insulated from a decline in consumer confidence, because necessity spending does not change as significantly with these fluctuations. Owners and managers should consider these trends when strategizing on the ideal tenant mix,” said the report.
Stephanie Hannon, SVP and National Lead, Retail Services, Real Estate Management Services, Colliers Canada, said it’s important to note that what Colliers defines as open-air retail are strip centres, neighbourhood centres, big box centres. The survey does not include malls or urban streetfronts.
Stephanie Hannon
“These types of assets, just between necessity based centres, demonstrate a higher confidence level from tenants and consumers. The findings demonstrated that profits could be on par or better than last year despite interest rates and inflation fluctuations this year,” she said.
“We also show throughout the report that vacancy rates in these types are lower than overall vacancy rates for the general grouping of retail which would include the enclosed malls and urban streetfront retail.”
Hannon said there’s more confidence in the open-air retail assets because there’s less competition from online.
“Consumers’ likelihood to shop online for necessity-based products is less than apparel or books or electronics. Consumers are shopping more frequently for that tactile experience. Grocery being the biggest one. It’s always going to be an in-person errand,” she said.
“When we asked retailers to express what sales would be like with inflation where it was, and keep in mind when we did this we were doing it up to the third quarter of the year when inflation was still around 3.8 per cent, retailers are optimistic and positive. Despite the cost of goods being higher, their sales are bridging the gap and allowing them to forecast an as profitable year this year as last year and potentially a bit more profit next year.”
High Street Shopping Centre in Abbotsford, BC (Image: Colliers)
The report said the growing adoption of e-commerce is unlikely to impact necessity retail as significantly as non-necessity retail.
“E-commerce as a percentage of total Canadian retail sales sits at approximately six per cent and is expected to rise to eight per cent by the end of 2025. That said, as Colliers previously reported, when consumers choose to shop online, they are more likely to purchase non-necessity products compared to necessity products. Foot traffic for open-air retail is unlikely to be impacted as significantly as other categories of retail,” it said.
“41 per cent of open-air retailers are interested in engaging with the owner and manager on initiatives to drive greater profitability. While consumers tend to purchase necessity goods in-store, the existence of an e-commerce platform – and subsequent synergies with brick and mortar – has proven to be more profitable. While open-air retailers without an e-commerce platform often point to the nature of their business as being unsuitable for online transactions, 26 per cent are prioritizing a stronger online presence in 2024.”
Colliers said Canadian retail sales at the end of Q3 2023 have grown by a modest two per cent compared to the same period in 2022, lower than 3.8 per cent inflation.
That said, the discrepancy between the growth in sales (2.1 per cent) and inflation (3.8 per cent) indicates that the retail sector’s growth is not keeping pace with the rising cost of goods and services, effectively marking a contraction in real terms, said Colliers.
“There is a direct correlation between consumer confidence and non-necessity spending, meaning when confidence declines, so does non-necessity spending. The reverse is true for necessity goods. Here, there is an inverse correlation, meaning as confidence declines, necessity spending increases,” said the report.
“As we enter a period of low consumer confidence, necessity retailers, including grocery stores, general merchandise, and health and personal care stores – many of which are found in open-air retail centres – are expected to fare well.”
When asked to evaluate how their business has fared in 2023 thus far, 42 per cent of open-air retailers say it has been profitable. Anticipating that inflation will stabilize further next year, retailers are expecting to fare better, with 65 per cent projecting they will be profitable in 2024. The disparity between necessity and non-necessity retailers is noteworthy, as necessity retailers are 30 per cent more likely to expect a profitable year in 2024, said the report.
“Open-air retailers prioritize the condition and maintenance of the retail property nearly as much as rent and location when assessing whether to renew or sign a new lease,” it said.
“The priorities of retailers and consumers are aligned in this regard. As Colliers previously reported, when asked about their motivation to visit a retail property, consumers ranked cleanliness higher than other factors, such as amenities, parking availability, and variety of stores.
“Retailers are approaching the holiday season with cautious optimism. The majority (55 per cent) of retailers anticipate their sales and profits will hold steady, mirroring last year’s performance. However, there is a notable sense of caution. While the majority are expecting similar sales and profits, of the remainder, a slightly higher percentage believe profits will be lower.”
Close to 500 million people use the Pinterest platform to plan what’s next in their lives – their next home, their next meal, their next trip.
The company says that gives it unique insight into the future and what’s going to be really big, really soon.
It has released its latest Pinterest Predicts not-yet-trending report that shares emerging trends for the coming year. It’s Pinterest’s guide to what people will shop, try and buy next.
Kristie Painting
“Each year, Pinterest sets the bar for trend spotting by releasing its “not-yet-trending” trend report ahead of the New Year. With an 80 per cent accuracy rate for the fourth year in a row, Pinterest Predicts is not based on guesswork or clairvoyance, but a blend of art and science that analyzes the billions of searches made on Pinterest each month,” said Kristie Painting, Country Manager, Canada, Pinterest.
“By harnessing the power of Pinterest’s predictive trend data, Pinterest is giving consumers and advertisers a head start on what we believe will be the biggest and hottest trends for 2024.”
Knockout Workouts (Pinterest Predicts 2024)
Pinterest said its unique trendspotting model is a blend of art and science that analyzes the billions of searches made by more than 480 million people from around the world that come to Pinterest each month to plan what to do, try or buy next. New machine learning technologies allow the company to identify patterns in the data and curate those findings into the Pinterest Predicts report, a genuine “cheat sheet” for everyone who needs to know, before anybody else, what it predicts is going to take off and continue to grow in 2024.
“From the team who saw the 2023 Mush-rooms trend and the 2022 Dopamine Dressing era coming and with an 80 per cent success rate for the fourth year in a row, Pinterest Predicts has proven itself to be the reliable trend spotter that consumers and advertisers can trust,” said the company.
“The mindset of the Pinterest audience really is the secret sauce: Because people come to Pinterest to plan, we have unique insight into what’s going to be the next big thing. More than half of our users see Pinterest as a place to shop, and this year, Pinterest is making Pinterest Predicts more shoppable than ever: Consumers from around the world can shop trends through an online store—the Pinterest Predicts Shop . . . Pinterest is opening its first ever pop-up shop in New York City, a five-day event where customers can shop and experience the biggest trends of 2024 alongside workshops and custom experiences from Levi’s and MAC Cosmetics.”
Here are Pinterest’s trends in different categories
BEAUTY
Blue Beauty
Blue Beauty (Pinterest Predicts 2024)
Aquamarine makeup is back and bolder than ever. In 2024, Gen Z and Millennials will find new ways to incorporate this 60s staple into their modern beauty routines.
“Blue eyeshadow aesthetic” +65%
“Fun blue nails” +260%
“Light blue prom makeup” +70%
“Aqua makeup look” +100%
“Blue quince makeup” +85%
Head to Glow
Head to Glow (Pinterest Predicts 2024)
Body care will have a major moment in 2024. Boomers and Gen Z will double down on luxury lotions and in-home spa experiences.
“Sunscreen” +75%
“Body lotion aesthetic” +245%
“Spa aesthetic” +60%
“Body skin care routine” +1,025%
“Bodycare” +845%
Make It Big
Make it Big (Pinterest Predicts 2024)
Beauty and baubles will get bigger, bolder and puffier in 2024. Millennials and Gen Z will opt for styles that match their “fluffy hair” aesthetic and sculptural jewelry.
“Chunky hoops” +45%
“Big braids hairstyles” +30%
“Wavy perm men” +50%
“Sculptural jewelry” +75%
“Big bun” +230%
CELEBRATIONS
Groovy Nuptials
Groovy Nuptials (Pinterest Predicts 2024)
70s-inspired weddings will make a serious comeback this year. From disco decor to bohemian bachelorettes, Boomers and Millennials are behind this retro-inspired return to the dance floor.
“Groovy wedding” +170%
“70s bride” +50%
“Retro wedding theme” +80%
“Groovy bachelorette party outfit”+110%
“Retro bachelorette party decor”+35%
ENTERTAINMENT
Jazz Revival
Jazz Revival (Pinterest Predicts 2024)
This year, Millennials and Gen Z will trade in their electronic beats for something far more retro: vintage jazz. Jazz-inspired outfits, dimly lit venues and lo-fi looks are all on the rise
“Jazzaesthetic clothing” +180%
“Jazzbar outfit” +75%
“Jazzfunk” +75%
“Piano jazz” +105%
“Jazzclub outfit” +65%
FASHION
Bow Stacking
Bow Stacking (Pinterest Predicts 2024)
Millennials and Gen Z will adorn their outfits, shoes, hair and jewelry with this oh-so-delicate detail. Bow large or bow small, next year brings bows for all.
“Bow outfit” +190%
“Bow necklace” +180%
“Bow aesthetic” +55%
“Bow crochet” +80%
“Heels with bows” +40%
Eclectic Grandpa
Eclectic Grandpa (Pinterest Predicts 2024)
In 2024, Gen Z and Boomers will embrace grandpacore and bring eccentric and expressive elements for the ages to their wardrobes. Think retro streetwear, chic cardigans and customized clothing.
“Customised denim jacket” +355%
“Eclectic clothing style” +130%
“Grandpa core” +65%
“Retro streetwear” +55%
“Grandpa style” +60%
FOOD AND BEVERAGE
Melty Mashups
Melty Mashups (Pinterest Predicts 2024)
In 2024, two ooey gooey, treat-yourself favorites will make mouth watering mashups like “burger quesadillas” and“pizza pot pies.” Gen X and Boomers will feast on this all-new food fusion.
“Pizza pot pie” +55%
“Gummy candy kabobs” +170%
“Carbonara ramen” +165%
“Cheeseburger tacos” +255%
“Burger quesadilla” +80%
Tropic Like It’s Hot
Tropic Like It’s Hot (Pinterest Predicts 2024)
In 2024, your favorite foods, home decor trends and fashion finds will get the tropical treatment. Boomers and Gen Z are driving this escapist aesthetic complete with hibiscus prints and tasty mocktails.
“Pineapple mocktails” +70%
“Crushed pineapple upside down cake” +50%
“Coconut aesthetic” +35%
“Hawaiian sheet pan chicken” +35%
“Tropical chic decor” +110%
FINANCIAL SERVICES
Cute Coins
Cute Coins (Pinterest Predicts 2024)
This year, Gen Z and Millennials will take their money and make it a lil’ cuter. Credit cards will get a makeover. Piggybanks will be customized. And oh yeah. Stickers. On. Everything.
“Credit card stickers” +140%
“Ceramic piggy bank” +95%
“Teddy bank” +75%
“Piggy bank design” +55%
“Aesthetic piggy bank” +35%
HOBBIES AND INTERESTS
Making a Racket
Making a Racket (Pinterest Predicts 2024)
A little birdie told us that in 2024, Gen Zand Millennials will be smitten with badminton. Searches for everything from “badminton outfit” to “playing badminton aesthetic” will be big in the year ahead.
“Badminton racket” +80%
“Badminton bag” +105%
“Badminton shoes” +50%
“Badminton outfit” +80%
“Playing badminton aesthetic” +45%
Give a Scrap
Give a Scrap (Pinterest Predicts 2024)
Excess will be in for 2024. Boomers andGen X will transform basic tees to unique-to-me fits with whatever snips and shreds they can find.
“Small scrap wood projects diy”+1,220%
“Discard recipes” +165%
“Craft work with waste material”+140%
“Zero waste sewing patterns” +80%
“Scrap quilts patterns leftover fabric”+80%
Aquatecture
Aquatecture (Pinterest Predicts 2024)
This year, Gen X and Millennials will go all in on “small aquarium designs” and over-the-top “turtle terrariums. ”Aquatic architecture will be the hot new home trend.
“Small aquarium design” +245%
“Fish tank themes ideas” +410%
“Turtle terrarium ideas” +135%
“Planted fish bowl” +95%
“Bioactive vivarium” +85%
Be Jelly
Be Jelly (Pinterest Predicts 2024)
From home decor to couture to beauty ideas, a whole mood will bubble up in 2024, inspired by your favourite invertebrate: jellyfish. Gen Z and Millennials are driving this squishy aesthetic.
“Jellyfish haircut” +615%
“Jellyfish hat” +220%
“Jellyfish umbrella” +195%
“Blue jellyfish” +155%
“Jellyfish lamp” +95%
Knockout Workouts
Knockout Workouts (Pinterest Predicts 2024)
The ultimate 2024 stress reliever: punching the air. This year, Millennials and Gen Z will go all in on combat sports like karate, kickboxing and jiu jitsu as their daily dose of “me” time.
“Karate kumite” +190%
“Kick boxing aesthetic” +265%
“Mixed martial arts training” +200%
“Shadow boxing workout” +60%
“Jiu jitsu” +30%
HOME
Kitschens
Kitschens (Pinterest Predicts 2024)
This year, Gen X and Boomers will quirk up their cooking areas with thrifted finds, vintage appliances and eye-jarring pops of paint. No minimalist aesthetic is safe.
“Eclectic kitchen decor” +50%
“Kitschy kitchen” +75%
“Green kitchen paint” +55%
“Eccentric kitchen” +160%
“Retro pink kitchens” +40%
Cafécore
Cafecore (Pinterest Predicts 2024)
This year, at-home coffee stations will become the new way to espresso yourself. Boomers and Gen X will drive searches for everything from “cafe chalkboard” aesthetic to “coffee station decor.”
“Coffee bar styling” +1,125%
“Chalk sign ideas” +100%
“Cafe chalkboard” +50%
“Coffee station decor” +145%
“Kafe aesthetic” +820%
Western Gothic
Western Gothic (Pinterest Predicts 2024)
Meet Western goth: your soon-to-be decor obsession that’ll mix vintage Americana chic with deep, moody hues. Expect to see Gen Z andBoomers DIY in style with dark fringe and even darker paint.
“Western bedding ideas” +310%
“Vintage americana” +145%
“Country room ideas” +125%
“Western mirror” +125%
“Western gothic” +145%
Hot Metals
Hot Metals (Pinterest Predicts 2024)
Silver tones and bold chrome so hot right now. Metallics will make their way into the mainstream in 2024 as Gen Zand Millennials trade in their neutrals for something a bit more hardcore.
“Nail art metallic” +295%
“Aluminum furniture” +45%
“Silver necklaces layered” +50%
“Aluminum door design” +70%
“Metal corset” +35%
PARENTING
Inchstones
Inchstones (Pinterest Predicts 2024)
In 2024, tiny triumphs will make the heart grow fonder as parents sprinkle party vibes on their kids’ not-so-grand moments. Baby’s first tooth? Here’s a cupcake.
“End of year school party ideas” +90%
“Monthly milestone ideas” +90%
“Baby naming ceremony” +35%
“Potty training rewards ideas” +100%
“My first tooth party” +40%
TRAVEL
Rest Stops
Rest Stops (Pinterest Predicts 2024)
This year, people will plan trips that take it extra slow—and catch up on some precious z’s. Gen Z and Millennials will retreat to laidback locales that offer the opposite of a jam-packed itinerary.
“Staycation hotel” +70%
“Solo traveling” +145%
“Slow life” +60%
“Digital detox challenge” +80%
“ASMR sleep” +165%
Dirt Flirts
Dirt Flirts (Pinterest Predicts 2024)
Boomers and Gen X will load up their 4x4s and make for the mountains—or at least look like they are. In 2024, off-roading can be an aesthetic or a lifestyle.
“Overland gear” +110%
“Off road camping” +90%
“Off road wheels” +70%
“Off road car” +40%
“Adventure car” +80%
WELLBEING
Big Talk
Big Talk (Pinterest Predicts 2024)
2024 will be all about forging deeper connections. Gen Z and Millennials will drive this trend, searching for new conversation starters and intimate questions to help couples reconnect.
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
Leasing and investment conditions in Vancouver’s retail market have been resilient, while ongoing economic turbulence and an expected sluggish holiday spending season provide more challenges for the asset class that has remained surprisingly stable.
The national picture for retail leasing and trades also remains relatively positive, say CBRE insiders, pointing to record population growth, strong necessity-based retail and rebounding tourism among the supportive factors.
Adrian Beruschi
Over the last five or six years people have been forecasting the demise of bricks and mortar retail and the pandemic was expected to accelerate that retreat, said CBRE senior vice-president Adrian Beruschi in a recent interview. Instead, retail has been relatively stable compared to the office and multi-family sectors — though some pain could be felt before robust growth arrives.
“We never saw the vacancy that we anticipated, but also a lot of landlords (are) maybe a bit empathetic, or worried, or fearful of vacancy, (and) didn’t crank rents up either,” said Beruschi, who specializes in retail sales and leasing around Vancouver.
Metro Vancouver retail enjoying leasing stability despite headwinds
“Retail has been the most stable of all the local asset classes for leasing,” said Jason Kiselbach, CBRE’s managing director in B.C. He was speaking on Nov. 7 at the Vancouver Strategy and Leasing Conference.
Jason Kiselbach
He said several factors have kept retail above water, despite economic headwinds, inflation and elevated interest rates. “There’s been a lack of new development of traditional retail in the region, and any new development project has experienced strong pre-leasing demand.”
Major projects that include retail space, including the massive Oakridge redevelopment, are still receiving strong interest from tenants. “I expect (Oakridge) to deliver mostly leased,” Kiselbach said.
“The combination of population growth, a boom year for tourism, and a resilient consumer has also meant more money spent in the local economy,” Kiselbach said.
“Retailers from all categories from discount to mid-market and luxury see Vancouver as a top city to be located,” he said during a market roundup presentation at the conference. “This has led to new stores planned or opening in many of the major retail corridors, including brands like Balenciaga, Esprit, Acr’teryx, Monos and Peak Performance.”
Monos on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
Beruschi agreed, noting that many of Vancouver’s shopping streets continue to attract creative, entrepreneurial shops and restaurants especially in popular shopping districts like West 4th.
“Moderate new supply and growing tenant demand have contributed to a declining vacancy rate for both street-front and mall properties,” Kiselbach said.
That shouldn’t change, as many urban redevelopment sites in the region will demolish existing large-format retail and replace it with smaller retail spaces, reducing regional supply. This will continue to keep vacancy low and will put upward pressure on lease rates, he said.
National retail picture reveals ‘a new discipline’ but challenges could emerge
Ribbon Cutting at The Well in Toronto on November 17th, 2023 (Image: Dustin Fuhs)
Nationally, total retail investment activity has been moderate so far this year, logging $1.2 billion in property sales in Q2 2023, down from about $1.5 billion from the first quarter, according to CBRE’s Canadian Investment Overview, released in September.
The current economic climate, inflation and elevated interest rates have paused leasing activity amongst some retailers, but not all, the report said, noting that personal services and quick service restaurants remain leaders. Good retail real estate, especially unenclosed space, continues to be leased quickly. This is expected to continue, and when paired with a softening supply pipeline caused by higher construction costs.
“In some ways, the retail landscape is actually healthier than it was pre-COVID in that the effect of the pandemic was to accelerate the closure of weaker retailers allowing landlords to increase tenant quality in many cases,” said CBRE chairman Paul Morassutti in a presentation at the conference. “New supply has been limited and disciplined,” he said.
“Over the past year, leasing spreads have been quite healthy, and investor interest is relatively strong, but at the same time there is cyclical pressure on the sector,” he warned. “Canadians have burned through a large part of their cash balances and are beginning to spend less as inflation continues to hike. Sales growth in almost all categories is moderating and consumer confidence is dipping.”
For example, new survey by KPMG in Canada found that more than eight in 10 consumers plan to tighten their belts this holiday season as retailers face pressure to improve loyalty programs and customer experience.
The recession would obviously add to pain in the sector, but essential retail with grocery anchors is flourishing, Morassutti said. “Canadian retail REITs have somewhere between zero and 20% exposure to the smaller, weaker tenants that may be impacted more by a recession.”
Cracks could also start to appear in the Lower Mainland, Beruschi said. “There could be some challenges with (rising) interest rates,” he said. “And I always think in Vancouver specifically that people’s disposable income isn’t necessarily as high as it is… in Calgary or Edmonton, just because everything’s so expensive in this city.”
The next 18 months will be telling for the local and national retail investment market, Beruschi added.
There will be buyers in the market who recognize the overall stability of retail, but sellers will also see that stability and could end up holding on to assets. “There haven’t been too many retail trades, which has been frustrating because I like selling buildings and retail assets, but it’s been surprisingly slow on the disposition of retail assets.”
Wetzel's Pretzels at Union Station in Toronto (Image: Dustin Fuhs)
Armed with a vision and a tasty recipe for soft pretzel perfection, Bill Phelps and Rick Wetzel opened the first Wetzel’s Pretzels bakery in Redondo Beach, Calif., in 1994.
“Long lines of hungry customers soon formed, attracted by mouth-watering soft pretzels that were hand-rolled, baked fresh and served hot from the oven. As word spread about these golden-on-the-outside pretzels, the company added additional offerings to its menu,” says the company on its website.
“Today, Wetzel’s Pretzels has grown to more than 340 fresh bakeries across the United States and around the world, including premier locations at Disneyland Resort and Walt Disney World Resort. Every Wetzel’s Pretzels bakery lives by the original vision of its founders; that each super-premium pretzel will be crafted from fresh dough and baked in-store consistently throughout the day, to ensure a delicious offering for each customer, regardless of when the craving for a pretzel strikes.”
Image: Wetzel’s PretzelsWetzel’s Pretzels at Union Station in Toronto (Image: Dustin Fuhs)
And now the concept is in expansion mode in Canada.
Vincent Montanelli
“One of the things that’s super exciting about our brand is next year, 2024, we will be celebrating our 30th anniversary,” said Vincent Montanelli, COO and brand leader.
“We will open our 400th location in 2024 in January.”
The company, which is based in Pasadena, California right near the Rose Bowl, opened its first store in 1994 in the South Bay Galleria in Redondo Beach in Southern California. Its parent company is MTY Food Group based in Montreal.
Today, it only has five stores in Canada. It recently opened its latest Canadian location in Union Station in Toronto.
“The reason why that’s so exciting is because MTY is a Canadian based, publicly-traded company. It’s a very large company. So one of the great things about MTY’s acquisition of Wetzel’s Pretzels (in 2022) is it really opened the door for Canada for us because they have so many restaurants and so much development history there. This is the first one in Toronto that we’ve developed under the ownership of MTY and the help of MTY and we have big plans for expanding in the Canadian market next year and into the future,” said Montanelli.
Wetzel’s Pretzels at Union Station Franchisee Bruce Liu (Image: Wetzel’s Pretzels)
“The company is publicly traded so I wouldn’t want to speculate incorrectly. But we plan on significant development in Canada.
“The market already has pretzel purveyors in it. We know the Canadian consumer responds well to the product. We think the strategic alliance with our parent company gives us a really good connection to the developers in order to identify locations, in order to plug into their franchise network. Call me biased but I believe our pretzels are better and I believe that our product is more exciting. I believe that our brand is more relevant. It’s something that I’ve spent 20 years of my life developing and I have a big passion for it. I think the Canadian consumer will be excited to get to experience what we share with customers at 400 locations in the U.S. every single day.”
Image: Wetzel’s Pretzels
Montanelli said the company wants to bring pretzels to the people. That means it’s looking for many different avenues for customers to use the brand and for franchisees to develop.
“We have the traditional footprint in malls where you can get a pretzel or a lemonade or a Wetzel Dog at a traditional location in the mall at a kiosk. In the U.S., we’re growing today inside Walmarts and inside Macy’s. We’re also developing inside of large travel plazas where people stop for gas and buy food,” he said.
“And we’re also taking it on the road and delivering at food trucks throughout the country. I think in Canada we want to let the consumer get familiar with our product. So we’ll do just like we did in the U.S. and we’ll start out in the malls and we’ll help consumers learn about us and we’ll do that for the next year or two or three and then with our experience here in the U.S. and understanding how to grow and develop the brand strategically, we’ll move into those other avenues much more quickly than we did in the U.S.. I think we can develop rapidly in Canada with our experience and with our partners.”
Qiviuk, a Canadian luxury knitwear brand, is experiencing loss in sales due to a 90 percent decrease in Chinese tourists in Canada. Fernando Alvarez, the CEO of Qiviuk, discusses how the change is impacting the brand, new marketing strategies, and the future of Chinese tourism in Canada.
Fernando Alvarez
The main demographic of Qiviuk is Chinese tourists and has had a significant impact on the brand as they are unable to visit the store and experience the products in person. Chinese tourism is struggling to return back to normal and there is no timeline on when it will return to levels prior to the pandemic.
“It is surprising the Chinese tourism market has not snapped back to what it was before the pandemic. The challenge started when all travelers stopped because of Covid and it has been about two years and the recovery for Chinese tourism is still not great. Everyone is hopeful things will come to some normalcy and when it doesn’t – it comes with a price,” says Alvarez.
Alvarez says with its main demographic missing, it forces the brand to find new ways to reach target markets, such as using more digital marketing. This is allowing Alvarez to maintain consistency, keep existing consumers, create new relationships with shoppers and continue to educate consumers about the uniqueness of its products and concept.
Image: Qiviuk at Fairmont Lake Louise
About the brand
Qiviuk is a brand specializing in handcrafted and sustainable luxury clothing. Its focus is on creating high-quality knitwear garments, accessories and emphasizing sustainable craftsmanship.
Located in Alberta, the brand uses the world’s finest wool fiber including ultra-rare fibers such as Muskox located in the Canadian High Arctic, which is known for its quality and luxury. The brand also uses merino wool, cashmere, mulberry silk yarn, alpaca, bison and more.
The name Qiviuk originates from Qiviut – “the warmest, softest wool fiber and yarn found on earth.” The brand has partnered with the Arctic Indigenous population in Canada to help produce its products and consumers can find a variety of products including clothing for women, men, children and accessories. The best selling products are its Muskox and Plaza collection.
“We have a coordinated effort in an agreement with the producing communities in the North. We have taken a lot of careful steps, crafting and we use methods suitable for each specific item, some being by hand and some with advanced technology that we have either developed or obtained. We have managed to put the concept together through a lot of effort, creative approach and with a lot of sensibility to the people behind the native communities in the North, to the people that transform it and where we deliver.”
Qiviuk has two boutiques in Alberta: Fairmont Banff Spring and at the Fairmont Chateau Lake Louise. It also has one shop-in-shop at the Plaza Hotel in New York City.
New Marketing Strategies
After losing a huge amount of in-store shoppers, Alvarez says the brand created a new marketing strategy to stay connected with Chinese shoppers. The brand has redirected its focus by using more digital techniques such as the Little Red Book, influencers and other social media channels to reach the Chinese market.
“The question of whether we can gain our loss back through digital media is still to be seen but, we have done extensive research that indicates yes, we can do that. The advantage of marketing through digital platforms is you don’t have the physical limits of the amount of people you can have.”
Image: Qiviuk
The brand is learning about enhancing its brand presence and about the importance of diving into new markets. Alvarez says the brand is looking into expanding into other markets such as other Asian countries, Europe, the Middle East and will also be looking to seek opportunities in China.
“It is a constant challenge, especially for niche luxury brands like ours. You have to be able to sustain your philosophy and your quality of products consistently, even when this huge cycle affects your revenue stream. You have to be able to convey your life and the brand’s story, but we have learned we have to keep working on it consistently so we can get to where we need to go.”
Will Chinese Tourism Return?
Alvarez says one of the main reasons why Chinese are reluctant to visit Canada is because of politics.
“There is an underlying situation with the political issues that has happened between China and Canada, and of course I am not a political commentator, but certainly that has not helped. There is a perception that Canada is not as a welcome destination as it was before and of course that is not true.”
Image: Qiviuk
Another reason could be due to the lack of routes, capacity on airlines and the restructuring of visa offices. These elements, Alvarez says, need addressing: “Chinese tourism industry will not return back to normal until they have been and there has to be improvement including the perceived relations between Canada and China as it is still not quite there yet.”
“It affects the whole world. The Chinese market is where many brands placed all their hopes and growth into. We are seeing some return starting to happen in Europe and in Japan, but it has not returned to Canada yet. Every luxury brand in the world has had to see and react to this change in the Chinese market. Some think the Chinese market will return as soon as in the next few months, some think it will take at least three years – I think it will come back now.”
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
