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.
After a difficult 2020, Canadian retail sales broke a new record in 2021 and did so again in 2022.
The question is, “will 2023 follow suit?” With consumer confidence declining and the gap between household debt and savings widening, retailers face a few hurdles, says a new report by Colliers Real Estate Management Services.
Tenants’ desire to increase retail space suggests already low vacancy rates will decline by one per cent nationally over the next 18 months;
Retailers indicate that 2022 was slightly profitable for their business, with the majority expecting a modest increase in profitability in 2023 due to declining inflation;
Five lessons from profitable retailers: (i) have physical stores, (ii) build an e-commerce platform,
(iii) connect the physical store with the e-commerce platform,
(iv) incentivize in-store pick-up, and
(v) share the cost of returns with customers;
4. While retailers are predicting modest growth, abnormal patterns of consumer spending caused by the pandemic make it more difficult to predict exact levels of growth.
Jane Domenico, SVP & National Lead, Retail Services Real Estate Management Services for Colliers, said the expectation is that sales growth will be moderate this year in Canada.
Jane Domenico
“One of the reasons is the consumer is going to start acting a bit more like a normalized consumer pre-COVID. That’s one of the things that really surprised us in 2022. With inflation going up and the savings rate going at the same time, and negative consumer confidence, we weren’t expecting as strong at the end of the year for 2022,” said Domenico.
“We think sales will be at or better than 2023 but not the huge year-over-year growth that we saw the last two years and that’s both e-commerce and bricks and mortar sales.”
151 Bloor (Image: Dustin Fuhs)
Here are some of the key trends identified by the Colliers report and commentary on those trends:
Tenants’ desire to increase retail space suggests already low vacancy rates will decline by one per cent nationally over the next 18 months.
“Tenants were asked whether the pandemic changed the importance of physical retail space for their business. While the majority (57 per cent) of survey respondents indicate a desire to keep the same amount of space, the difference between those looking to increase (15 per cent) and decrease (nine per cent) – and the square footage – suggests that the vacancy rate will decline by one per cent nationally. This is consistent with our Q4 2021 report. New entrants to the Canadian market will support a further reduction in vacancy, likely placing upward pressure on retail rents in certain markets,” said Colliers.
Retailers indicate that 2022 was slightly profitable for their business, with the majority expecting a modest increase in profitability in 2023 due to declining inflation.
“When asked to rank their profitability on a scale from one to five (one being extremely unprofitable and five being extremely profitable), retailers averaged a 3.1. This is likely the result of inflation increasing business expenses, while reducing consumers’ discretionary income. Retailers are more optimistic for 2023, with profit expectations shifting from a weighted average of 3.1 to 3.6, likely due to expectations that inflation will be reduced,” said the report.
Five lessons from profitable retailers
Have physical stores: 87 per cent of retailers find in-store shopping to be the most profitable, followed by Buy Online Pick Up In Store (BOPIS).
Build an e-commerce platform: Retailers with an e-commerce platform were almost twice as likely to be profitable in 2022.
Connect the physical store with the e-commerce platform: Retailers that connected their physical store with their e-commerce platform were 35 per cent more likely to be profitable in 2022.
Incentivize in-store pick up: Retailers indicate some customers spend up to 35 per cent more than their original online purchase when they pick up in-store.
Share the cost of returns with customers: Retailers who shared cost of returns with customers were 40 per cent more likely to be profitable in 2022.
While retailers are predicting modest growth, abnormal patterns of consumer spending caused by the pandemic make it more difficult to predict exact levels of growth.
“The pandemic altered traditional patterns of consumer spending. The pandemic closed the gap between household savings and debt, which supported record high retail sales in 2021 and 2022. As household debt and savings trend towards pre-pandemic levels, this will have an impact on retail sales,” said Colliers.
“Traditionally, consumer confidence is an indicator of what to expect in retail spending. When consumers express confidence in the economy, they are likely to spend more, while pessimism is a sign that savings rates will increase. In 2022, a rare break from tradition saw retail sales actually increase despite declining consumer confidence. This is likely due to pandemic savings permitting greater spending. That said, as pandemic savings decrease, we are likely to see a return to the historic correlation between consumer confidence and retail spending.”
The Colliers report said Canadian retail sales in 2022 were the highest on record, totaling over $735 billion. This level of spending was fueled, in part, by pent up demand and higher than normal saving rates during the pandemic. That said, high inflation limited retailer purchasing power and diminished profits, said the report.
E-commerce as a percentage of total Canadian retail sales sits at approximately six per cent and is forecasted to grow to approximately eight per cent by 2025, said Colliers.
“For several years, the growth in e-commerce was expected, by some, to come at the expense of brick and mortar. As we reported in January 2022, e-commerce and brick and mortar are “friends, not foes,” and unification is necessary to drive overall growth. Brick and mortar sales were $693B in 2022, representing a nine per cent increase over 2021. This is consistent with the growth we’ve witnessed over the past eight years, the only exception being 2020, due to the severity and length of lockdowns nationwide,” explained the report.
150 Bloor (Image: Dustin Fuhs)
“Consumers are predicted to return to pre-pandemic spending patterns this year, with sectors that facilitate experiences, such as full-service restaurants and apparel, primed for growth.
“While the pandemic changed typical spending behaviour, sales demonstrate we are returning to pre-pandemic spending patterns. Retail sectors that performed poorly during much of the pandemic, including full-service restaurants and apparel, are primed for growth in 2023. Other sectors, such as convenience stores and used cars, are expected to see the highest decline in sales.”
Some other key findings from the report:
55 per cent of retailers report having an e-commerce platform, with no notable fluctuation over the past year and a half;
The pandemic increased the adoption of e-commerce platforms. At the beginning of 2020, 27 per cent of retailers cited having an e- commerce platform, whereas that number is 55 per cent today, with another nine currently developing one;
Retailers who have an e-commerce platform were almost twice as likely to be profitable in 2022, and those with omnichannel capabilities were 35 per cent more likely to be profitable;
Retailers who have an e-commerce platform indicate that on average, online sales encompass 18 per cent of their total sales and they expect it to grow to 25 per cent by 2025;
54 per cent of retailers face persistent supply chain issues;
Almost half of retailers’ report using their physical units for more than just in-store shopping;
87 per cent rank in-store shopping as the most profitable mode of fulfillment, followed by Buy Online Pick Up In Store (BOPIS), and delivery to customers’ homes being the least profitable.
Community Natural Foods, owned by Calgary Co-op, will be opening its first store outside of Calgary this June in Edmonton’s Old Strathcona neighbourhood.
The health food store has three locations in Calgary.
“This is a tremendous opportunity to introduce this long-established and well-respected health food store to the Edmonton market, one that is currently underserved in the health food retail space,” said Ken Keelor, CEO of Calgary Co-op and President Community Natural Foods.
Ken Keelor
“We believe that wellness should be available for all, and we strive for this through the sharing of knowledge, offering choices in products we carry, and supporting local producers and partners invested in the wellness of our community members. We’re looking forward to assisting the people of Edmonton with their wellness journey.
“We’ve had our eye on Edmonton for a while. It’s sort of underserved market when it comes to health food. So we’ve always had an eye to Edmonton when it comes to the Community Natural Foods banner.”
Calgary Co-op acquired Community Natural Foods in November 2019.
Image: Community Natural FoodsCommunity Natural Foods (Image: Field Agent)
The Edmonton store will open in more than 10,000 square feet and will create about 40 jobs.
“It’s a really nice location. So firstly, it used to be a health food store with a different brand name. That health food store closed down and left the space vacant. Customers in that neighbourhood were potentially used to going to this physical location,” said Keelor. “We liked it because of that.
“It’s a nice size store at 10,000 square feet. It’s got good facilities when it comes to parking and the orientation of the building, entrance and exit and loading docks. Some of the physical features are attractive but the most attractive one is it used to be a natural food store and people were used to going there.”
Keelor said there is more opportunity for expansion of the Community Natural Foods brand in Edmonton.
“I’ve always been someone who is very focused. I don’t have a grandiose plan to put in a whole bunch of stores. I like to start with one and make it really exciting and make it a destination for Edmontonians. I’m hoping people from all around Edmonton will be driving to this store because it’s going to be really, really nice,” he said.
“Many Edmontonians know Community Natural Foods from Calgary. It’s a solid brand . . . It’s been around a while. Never say never. There may be opportunities for other locations in Edmonton.”
Image: Community Natural Foods
According to the company’s website, Community Natural Foods was founded in 1977 by the Wilkes brothers.
Calgary Co-op, owned by members, is one of the largest retail co-operatives in North America with locations in Calgary, Airdrie, Cochrane, High River, Okotoks, and Strathmore. It includes 22 food stores & pharmacies, 37 gas stations, 4 Home Health Care centres, 29 WSB stores (including World of Whisky and a World of Wine store) and 10 cannabis locations. Besides Community Natural Foods, Calgary Co-op operates and is the owner of Beacon Pharmacies, The Organic Box and Willow Park Wines & Spirits.
It has 400,000 members, 3,850 employees, assets of $700 million, more than 100 stores and annual sales of $1.3 billion.
Keelor said the Community Natural Foods store could also expand to markets just outside the City of Calgary.
“We see Community Natural Foods as a banner that has opportunity to grow and expand geographically,” he said. “There’s areas around Calgary as well that continue to be an opportunity for us. I will just say that you can expect Community Natural Foods to continue to expand. What we’ve done in the last three years since we bought it, beyond weathering the COVID storm, we completely re-did the decor and presentation of our downtown Community Natural Foods store. That’s the first one we touched.
“We did a new design. We worked with a third-party to actually build a new design and execute it in that store. We inherited the size and shape of that store but we were still able to move things around to kind of line up with our new design . . . It’s completely transformed versus the previous look without losing the essence of who Community Natural Foods is.
“So that design we’ll continue to use. We’ll be able to use it in Edmonton. We’ll be able to use it in the other two stores here in Calgary and in other areas we might choose to open these Community Natural Foods stores.”
Recently Calgary Co-op announced its plans to expand in the Town of Cochrane just west of Calgary. The grocery chain purchased six acres of land in the commercial shopping centre of the new, centrally-located mixed-use community of Greystone. The development plan, which is subject to approval, includes a 35,000-square-foot Calgary Co-op Food store including a Pharmacy, a Wine Spirits Beer, Cannabis and Convenience store as well as a six-pump Gas Station with a double touchless car wash, and an additional 30,000 square feet of commercial retail space.
Construction is set to begin in the Fall with an anticipated opening date of Spring 2025.
Toronto-based jewellery brand Jewels by Alan Anderson has opened a new retail space, will be launching new collections soon, and in September Anderson will be celebrating 25 years as a jeweller.
Anderson founded the jewellery business in 1997 and he is now known worldwide as Canada’s couture costume jeweller where everything is handcrafted. Since outgrowing its previous Toronto location, Anderson was delighted and grateful to be able to move into the new ‘atelier’ space located at 449 Jarvis Street and it was exactly what he was looking for.
“We are so lucky as we are on the second floor and it is 2,000 square feet and thrilled to say we are finally here. The Atelier started many years ago in a little historic Victorian building and we had outgrown it and now we are in the Edward Blake House, it is a big gothic Victorian house and it is one of the last remaining in Toronto,” says Anderson.
Alan Anderson Jewels (Image: Alan Anderson)Alan Anderson Jewels (Image: Alan Anderson)
The Edward Blake House was built in the gothic revival style and was named after the original owner who was the second premier of Ontario and remained in the family until 1917. The house was built back in 1891 and is one of the last remaining heritage buildings in Toronto.
“I love that for the branding because I go back to a different era with my products I am making, I am influenced by European royalty and 1930s, 1940s, and Hollywood – there is a glamorous feeling to what I do and when I got the opportunity to take this space, we moved into it and we are so lucky.”
The 2,000 square feet space comes with all original period details, a working fireplace, moldings, and a beautiful sweeping staircase. Costumes can find a variety of jewellery such as necklaces, rings, earrings, bracelets, broaches, cufflinks, pendants, and jewellery boxes.
The new location is accessible as there is parking and customers who want to experience Anderson’s are welcome to book an appointment, come in on open house days which Anderson says will hopefully be every Wednesday, or if someone is around the conor and wants to pop in, Anderson says they can give a quick call to see if they are available or not. People can also find Anderson’s jewellery in boutiques across North America and the brand ships worldwide.
Supporting Other Local Designers
Alan Anderson Jewels (Image: George Pimetel)Alan Anderson Jewels (Image: Alan Anderson)
The space is three times larger than what Anderson is used to working with and he will be using the space for not only creating his work and showcasing his pieces, but will also be used to host events to support other local designers in Toronto as Anderson said he has seen a void in the Canadian retail market for Canadian design.
“We have big box stores, but there is not really a large retailer that focuses on local Toronto brands and there are so many amazing brands: there is menswear, womenswear, accessories, and more. I think customers are looking for something different where there is a story attached, they know the person designing it, and they know where it is made – it is not fast fashion, it is cut and sewn in the city and I think that is really important to the story of what we are doing with the new Atelier and showroom.”
Anderson says he is mapping out the year for events and is working with designers that share common aesthetics. Over the years, Anderson said he has developed friendships and networks with around twenty-five other Toronto and Canadian brands and plans to have events also showcasing their work. For example, maybe it is an event that shows women’s fashion, handbags, or suits along with Anderson’s jewellery.
So far, Anderson is booking an event for the space every month as he already had one this month, and has one planned for May and June. In between these two events, Anderson is also doing shows in Vancouver, Boston, and Saskatoon, “but will be trying to schedule at least one or two events a month in the space with other designers” as supporting other local designers is important.
“It doesn’t matter what city you live in, there is always amazing talent and instead of supporting fast fashion and bix box fashion that doesn’t benefit anybody, I always love the expression of when you shop from a small retail designer, you are literally shopping from the person who had the vision to create it. And it is really exciting that we now have the space to showcase other local designers as we all share a common thread of supporting each other and it is exciting.”
What is Next?
Alan Anderson Jewels Opening Party on March 21st, 2023 (Image: George Pimetel)
Alan Anderson Jewels (Image: George Pimetel)
Alan Anderson Jewels (Image: George Pimetel)
In April, Anderson will be dropping the new Spring/Summer collection and later will be launching a new handbag line in collaboration with Anavi Designs. The new handbags will be handcrafted in Toronto with a jewel detail and will be available in September.
Anderson said he will also be celebrating his 25th anniversary as a jewellery designer and is planning a celebration for his success.
“It is amazing to think I have been doing this for 25 years and for spending my life doing something I love, and to say I followed my passion and dream for 25 years is really an amazing thing for me. 17 years ago I quit my full time job to do this, and now I am in this amazing space and I am full of gratitude and this is my immortality. I am 56 years old, and in 50, 60, or a 100 years from now, my jewellery will still be around so it is amazing it will live past me and it blows me away.”
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.
This federal budget had more leaks than the Titanic. There were so many leaks ahead of its release on Tuesday that most of us already knew what was in it beforehand. Many years ago, ministers of finance would be asked to resign if the secrecy of the budget was breached. These are different times.
Just like last year, the budget did not have a dedicated section for agriculture or food, but it did offer one interesting attention-grabbing nugget. The so-called “grocery rebate,” a one-time payment, will help some, but only for a very short period, and food inflation will remain a challenge for all Canadians for quite some time. The government got cute by renaming the GST rebate, without providing the 11 million people receiving the payment any relief that was solely dedicated to healthy food purchases inspired by Canada’s Food Guide.
Americans have a massive SNAP Food Benefit program which supports families in need. Commonly known as the Food Stamp program, it is funding that is given to families to lessen the burden of inflation at the grocery store, no matter what might be happening with food prices. It may be time for Canada to give Agriculture and Agri-Food Canada the task of developing such a program for Canada. This would be a massive undertaking, but we need to start somewhere.
But the grocery rebate won’t do much for Canadians over time. This is what happens when you politicize food inflation. In terms of public relations, cheques are real while fiscal changes that would have a substantial impact are not. But what is most concerning is how pouring an extra $2.5 billion into the economy could make food inflation an even more serious problem. Many provinces have fallen into the same trap. Stimulating our demand can only push prices in one direction, including food prices.
Milton Freidman famously said that inflation “is always and everywhere a monetary phenomenon.” He was not entirely correct. It is rather a monetary phenomenon involving government obligations. The Bank of Canada cannot solve inflation on its own, and governments need to assist in this, but it can be overdone. The “grocery rebate” is exactly that. Handouts are a mirage for the needy.
One measure the government could have eliminated are sales taxes on food when it is not served or processed on-site. With the shrinkflation trend, many food products are no longer defined as groceries by the Canada Revenue Agency but rather are labelled snacks, which are of course taxable. Adding HST on food items increases prices by 5 to 15 percent. Food at retail should not be taxed, period. But that’s not as sexy as giving handouts.
One item where the Liberals clearly appropriately read the room was on the alcohol tax. The federal alcohol “escalator tax” automatically increases the tax on beer, wine, and spirits every year across the country by the rate of inflation. It was set to increase by 6.3 per cent on April 1 of this year. Now, the increase will only be 2%. This was good news for consumers, but most important for restaurants and the various other industries involved with these beverages, enjoyed by a large number of Canadians.
Cleantech is the overarching commitment in this budget. Making our food sector greener has been a priority for this government. A portion of the budget is dedicated to bio-fuels, which represents a win for agriculture. All regions of the country are recognized as having strong potential for further investment. A budget set at $520 million is earmarked for carbon capture projects, a welcome recognition of the Prairies’ focus on making carbon sequestration a priority. But still no attention was given to how the increasing carbon tax will impact food distribution and affordability in Canada by 2030, when the tax itself will reach $170 a metric tonne. As of April 1 of this year, Canada will have the 7th highest carbon tax in the world, according to Statistics Canada.
Some interesting items: The budget has provisions to deal with non-fat surpluses in the dairy sector. Many Canadians have wondered about the unexplained milk dumping incidents and the shortage of baby formula. The dairy sector will receive $333 million over ten years to support research and development of new products using non-fat dairy surpluses. But dairy is by far the richest and most resourceful agri-food sector we have in this country. Surely they could have come up with some cash themselves. Heck, they paid $20 million to put the dairy milk logo on the Toronto Maple Leaf jerseys.
Again, farmers looking for fertilizer options besides those from Russia will have access to some funding, $34.1 million in total. Other than that, there wasn’t much for industrial logistics. And little or no attention was given to international trade and interprovincial barriers, other than a brief remark that Ottawa is working diligently to eliminate most of these. Not very reassuring.
The budget was as predictable as it was unexciting. A greener agri-food sector is what we will have, but Ottawa doesn’t seem to care about whether the sector becomes more efficient to keep costs down, and our food more affordable.
The Canadian Federation of Independent Business (CFIB) says it is pleased that the federal budget confirms a deal to lower credit card fees for small merchants, as promised in last fall’s economic statement, but the budget was a missed opportunity to provide relief to small businesses facing massive debt loads and cost increases.
“The biggest win in the 2023 budget is the deal reached with Visa and Mastercard to reduce credit card fees for small business owners,” said Dan Kelly, CFIB president. “A 27 per cent reduction in small business merchant fees is significant, but more details are needed to determine how many small businesses will benefit from this plan.”
Dan Kelly
Kelly said the national organization was however disappointed by the lack of meaningful debt relief for small businesses in the budget, when more than half are still carrying pandemic-related debt at an average of $105,000.
“An extension to the Canada Emergency Business Account (CEBA) loan repayment deadline of December 31, 2023, is desperately needed and will be a major priority for CFIB in the weeks ahead,” he said.
The CFIB said it was also disappointed that the government continues to project deficits for the foreseeable future resulting in increasing debt charges that will reach $50 billion by 2027-2028.
“Bringing the budget back to balance remains a priority for small business owners,” said Kelly.
The federal government’s full budget can be viewed here.
The Retail Council of Canada said the Federal Budget contains a number of initiatives to address affordability challenges facing Canadian families, but it feels the government missed the mark by not including two key proposals from the Council that could have made life more affordable for Canadian families by saving them up to $1,000 per year on average.
“Specifically, slashing interchange rates for credit card acceptance could have saved Canadian families up to $600 yearly and the elimination or suspension of customs duties could have saved Canadian families a further $400 a year. Together, these unjustifiable charges cost Canadians a whopping $16 Billion annually,” said the Council in a statement.
“Canadians pay among the highest “swipe fees” in the world. It’s a reverse-Robin Hood problem – consumers with modest incomes subsidize prices for wealthier consumers who use premium and super premium cards. As well, growth in credit card sales have vastly outstripped (almost doubled) the growth in sales of the underlying goods at retail. Since credit is vastly more expensive for businesses to accept than debit or cash, the interchange growth on credit card sales has an inflationary impact. If the government cared about the inflationary and regressive $10 billion annual costs faced by Canadian consumers, it would have lowered interchange rates across the board in today’s Budget so that people see the savings wherever they choose to shop.
“Similarly, many people don’t realize that Canadians pay up to 20 per cent more for clothing, shoes, and baby items such as car seats, strollers, and diapers. Overall, these hidden taxes on consumer goods place a $6 Billion burden on Canadian families or $400 for each household. These tariffs were implemented long ago to protect textile and clothing manufacturers in Canada who have long since moved most production to overseas jurisdictions.”
The Council said it was also disappointed to not see adopted the creation of a Visitor Rebate which would have given tourists a tax rebate on goods they buy while in Canada – a huge opportunity for the Canadian economy.
“Similar programs in Japan and the Bahamas have seen growth in tourist spending of over 23 per cent and 19 per cent,” said the Council.
“Finally, with regards to today’s rebranding of the GST rebate system to help Canadians with the rising cost of food, we would point out that most groceries aren’t subject to sales tax to begin with. That said, we agree that delivering regular payments to Canadians on an income-tested basis is helpful during these challenging times.”
Self-Checkout at Shoppers Drug Mart (Image: Dustin Fuhs)
“This budget is giving taxpayers big deficits, more money wasted on interest charges and higher taxes,” said Franco Terrazzano, Federal Director of the CTF. “This government doesn’t care about fiscal prudence or helping taxpayers.”
Franco Terrazzano
The deficit is expected to reach $40 billion in 2023, which is almost $10 billion higher than forecasted in the fiscal update. There is no plan to balance the budget. The government overspent its own 2022 budget by $18 billion, said the Federation.
On April 1, the government is increasing the carbon tax to 14 cents per litre of gasoline and 12 cents per cubic metre of natural gas. Federal alcohol taxes will also increase by two per cent. Budget 2023 includes a tax on share buybacks, taxation on dividends received by financial institutions, higher taxes on top earners and intergenerational business transfers.
While the government is providing some one-time GST rebates, there are no broad-based tax cuts.
“Giving a few families back some of their GST money back is really just an admission there’s a problem without looking for a serious solution,” said Terrazzano. “Taxpayers need real tax relief.”
The CFIB said Employment Insurance (EI) premiums are not projected to increase for the next seven years. Following many years of Canada Pension Plan (CPP) premium hikes and the January 1, 2023, increase in EI, stable EI premiums would help small business facing many other rising costs of doing business. CFIB is pleased there were no significant new costly benefits added to the EI system in the budget, it said.
“While CFIB is pleased that the government is capping the hike in excise duties on beer, spirits and wine at two per cent for 2023, we will continue to press government to end these automatic tax increases. Sadly, the government missed another opportunity to freeze the upcoming carbon tax hike on April 1, putting further cost pressures on small firms,” said Kelly.
Here’s the CFIB comments on some other budget items: • Employee Ownership Trusts: CFIB is pleased to see proposed new measures to facilitate the transfer of businesses to their employees. This is an important measure as 70% of small business owners are looking to exit their firms in the next decade. • Intergenerational Transfers: New measures surrounding Bill C-208 hold significant implications for small business owners and require detailed review to ensure they are practical and respect the spirit of the Private Members’ Bill. CFIB will be studying the proposed amendments carefully but is pleased the government will only apply them starting January 1, 2024. • Internal Trade: The budget commits to reduce internal trade barriers through a Federal Action Plan which includes funding to help identify barriers to trade and explore ways to eliminate them. • Tradespeople Tool Deduction: It is good news that this deduction will double from $500 to $1,000, allowing tradespeople who provide their own tools as part of their employment to cover rising costs.
Restaurants Canada said it was pleased to see some positive measures in the 2023 federal budget to support Canada’s foodservice sector. The budget addressed the federal alcohol excise duty, which will now only increase to two per cent on April 1, rather than the initially planned 6.3 per cent. The federal government also highlighted an agreement with major credit card companies to reduce interchange fees, a big win for our sector, as it leaves more dollars in the hands of business owners – we look forward to more details to come on this initiative.
“The Canadian Government also took Restaurants Canada’s recommendations to invest in the hospitality and tourism industry through its Canadian Tourism Growth Strategy, which has the potential to bring back economic benefits to our sector,” said the organization.
“Though today’s announcement brought some positives, the government missed an opportunity to implement sector-specific support for the restaurant industry, which was the hardest hit by the pandemic, it said.
Olivier Bourbeau
“By leaving several of our recommendations on the table, such as extending the CEBA loans by 36 months and implementing a scale-down model on the forgivable portion, as we proposed in our Federal Pre-Budget Submission 2023, the Canadian Government missed the opportunity to save struggling small businesses from an uncertain fate,” said, Olivier Bourbeau, Vice President of Federal & Québec Affairs. “In a recent Restaurants Canada survey, we found nearly 20 per cent of the restaurants that have yet to reimburse CEBA will not be able to repay it in part or at all.”
Restaurants Canada also said: “Despite effective measures proposed by Restaurants Canada to address the foodservice sector’s labour shortage, the budget also failed to improve and streamline the Temporary Foreign Worker (TFW) program by;
Implementing the Trusted Employers’ Program;
Simplifying the TFWP application process, lowering fees and addressing the backlog;
Creating a dedicated food service stream (for TFWs); and
Remodeling the NOC codes (classification C and D): regrouping positions from the same field/expertise, providing more flexibility and training/promoting opportunities.”
The Canadian Chamber of Commerce said the 2023 federal budget was a chance to establish the right policy framework that builds this economy by encouraging investment and commerce.
“Today was an opportunity to lay out a clear plan for growth. While there are some positives, we still lack a coordinated strategy to generate that economic growth over the long term,” said Perrin Beatty, President and CEO of the Canadian Chamber of Commerce.
Honourable Perrin Beatty
“Businesses across the country are feeling the impact of anemic growth coupled with labour shortages and rising costs for doing business. For future generations to enjoy the opportunities and prosperity we have been so fortunate to inherit, we must unleash the potential of private industry by building a 21st Century workforce, investing in trade-enabling infrastructure and fixing our broken regulatory system.
In the aftermath of the pandemic, our international competitors continue to outpace us as Canada experiences extremely low growth. And achieving competitive levels of economic growth, a clean climate, and equal opportunity for all Canadians aren’t mutually exclusive, but mutually dependent. To achieve these goals we need government to eliminate the disincentives that drive away investment and focus on pro-business policies for the benefit of all Canadians, said the Chamber.
With over 800,000 job vacancies in Canada at this time, the Canadian Chamber of Commerce was also hoping to see the budget focus more sharply on the skills and talent our workforce will need now and into the future.
“Our country cannot borrow its way to prosperity,” said Beatty. “Canada needs policies, strategic investments and federal leadership that will spur economic growth. Canada’s businesses are anxious to do their part, but the federal government needs to see them as partners, not problems, in building a more successful Canada.”
Spring Market at Holt Renfrew Bloor Street (Image: Dustin Fuhs)
The rising cost of goods and services are having their impact on Canadian consumers in how and what they buy these days.
A new survey by PwC found that 47 per cent are either very or extremely concerned about their personal finances; 70 per cent are cutting back on non-essential purchases in response; 73 per cent visit physical stores at least monthly, with 23 per cent of consumers saying they frequently stand in long lineups and notice stores feel busier; and 42 per cent of Canadian consumers shop on their phones at least monthly.
Myles Gooding
“With consumers’ evolving expectations and a desire for an enhanced omni-channel experience, Canadian retailers have an opportunity to build new avenues for meeting consumers needs and differentiating their brand by creating frictionless and memorable experiences,” said Myles Gooding, National Consumer Markets Leader and Global Consumer Markets Advisory Leader, PwC Canada. “It is imperative for retailers to transform and capture a share of in-person and digital experiences. In order to be successful, retailers must reimagine how consumers use technology across multiple channels and effectively interact with their brand.
Indigo Bay & Bloor Plum Rewards (Image: Dustin Fuhs)
“There’s a lot of concern but people are finding ways to navigate around some of these inflationary pressures. Generally what it means is that discretionary spending is probably going to have some pullback. The necessities will still be in line. Groceries will continue to be bought. Health and beauty will continue to be bought.
“I think what remains to be seen is how much discretionary spend will be done in areas of travel and entertainment and maybe some clothing. Outside of that, retailers still have a great opportunity to capitalize on the new foot traffic that’s coming back, knowing that the pandemic is in our rear-view mirror a bit. Everybody is definitely coming out. The foot traffic has definitely increased. So it does create a unique opportunity for retailers to really create the right experience for the customer. There’s concern but we don’t know how much of that is going to turn into reality.”
Gooding said people are social animals. They want to be out next to each other. Consumers want the experience around the socialization of shopping. Feel the fabric of the clothing. Squeeze the avocado.
But we’re also seeing a growth in the number of consumers using mobile technology. It’s a convergence point.
“It’s a convergence point we’re seeing in the industry where you may be in a store where you’re looking for something and maybe a sales associate is helping you with something, you have something in mind, they actually pull up something on their iPad, even though they might not have it there, they can ship it to your house,” said Gooding.
Self-Checkout at Shoppers Drug Mart (Image: Dustin Fuhs)
“What we’re seeing is that there is a merging of digital and physical so that while you’re even in the store you’re going to be looking at what that retailer offers from a digital perspective as well. Some retailers are starting to interact digitally with their customers as well.”
Some of the other findings of the PwC report include:
Canadian consumers say self-service technologies and helpful staff can further enhance their retail experiences. With these human-led and tech-powered channels adopted, it effectively provides more time for staff to focus on higher-value activities that enhance the in-store experience;
More than half of the respondents (52 per cent) say knowledgeable and helpful sales associates are an appealing part of in-store shopping;
Self-service checkouts in particular stand out to Canadian consumers. Nearly half (48 per cent) say they’re an attractive feature of in-store shopping. Further proving that Canadian consumers have high standards, expecting fast and efficient service, and prioritize meaningful and trustworthy interactions;
One in five Canadian consumers say they expect to increase their spending over the next six months with retailers that provide an efficient delivery service. Supply chain issues can unfortunately threaten established relationships between brands and their customers. These supply chain challenges, albeit improved from last year, are an opportunity for companies to mitigate and create efficiencies with their supplier and distribution networks;
In PwC’s recent CEO Survey, 49 per cent of Canadian consumer markets CEOs told us they plan to adjust their company’s supply chains in 2023;
Businesses that successfully implement data, analytics and automation capabilities into their supply and distribution can improve their delivery efficiencies and have an opportunity to grow their market share;
One channel to watch closely is the metaverse. Immersive virtual worlds accessible through different platforms that let users socialize, work, play games and buy digital and tangible objects. Globally, it’s still in the early stages of adoption, with only 26 per cent of consumers using the metaverse. That figure is even lower in Canada, at 12 per cent.
“While we see consumer sentiment concerned, we still need to see the reality. Our consumer CEOs are still actually pretty optimistic about the future and believe if they’re providing the right experience for the customers, they’ll be able to trail through this year and really build on that,” said Gooding.
Goodwill, the number one global brand in resale, is looking to expand in Canada by opening more than 40 stores within the next five years due to the increased popularity of thrift shopping.
“In the last decade I have seen a change and particularly since Covid as there has been more ethical shopping and people wanting to shop with conscience and because thrift enables reuse, recycle, and repurposing – they are obviously more ethical than fast fashion which is one of the world’s biggest polluters. We can reduce new and increase reuse and everybody knows it is better,” says Kelly Duffin, the President and CEO of Goodwill, The Amity Group.
Rise in Resale
Image: Goodwill
Kelly Duffin
Duffin said resale is one of the fastest growing segments in fashion and today it is mostly fuelled by young adults between the ages of 18 to 35 who are looking to buy fashion at a lower price, want to shop ethically, and who also enjoy looking for unique and personalized looks that you can’t find anywhere else.
Customers can find a variety of unique products such as clothing, jewelry, paintings, musical instruments, and vintage items.
“There are also very real vintage things at Goodwill such as vintage lego, old computer games, old computers, typewriters, and other collectables – those would probably be the things that are special to people and unexpected.”
New Locations
Image: Goodwill
Within the next five years, Goodwill is looking to add more than 40 stores in Canada and more than 75 new donation centers. Each storefront is approximately 20,000 square feet and each donation center is around 2,000 square feet. In total, Goodwill is looking to expand its footprint by adding a million square feet of retail and over 300,000 square feet in light industrial and warehouse space.
So far, Goodwill has three confirmed new locations in Ontario including Niagara Falls which will be opening next month, Waterloo which will open in May, and Burlington which will be announced at a later time. Along with these, Goodwill is adding three storefronts and donation centers in Quebec and they will be in Gatineau, Montreal, and Quebec City. Duffin says more will come as there are more locations in negotiation, especially in Quebec, Ontario, and Alberta.
Image: Renaissance Goodwill
In Quebec, the key areas of growth Goodwill is looking at will include Montreal, Gatineau, Quebec City, Trois Rivieres, Drummondville, Victoriaville, and St. Hyacinthe.
In Ontario Duffin said they are looking at expanding further into London, Cambridge, Hamilton (including Stoney Creek and Waterdown), Burlington, Oakville, Milton, St. Catharines, Fort Erie, Dunnville, Welland, and Thorold.
And lastly in Alberta, it is looking into areas such as Calgary, Edmonton, and Red Deer.
Duffin says with each new location, the retailers surrounding it will also benefit because it will draw in more customers: “We are also a traffic driver as our age demographic is what landlords want to pull into their sites. We can be an anchor and we can also be very complimentary to retail stores including to higher end retailers.”
The Thrill of the Treasure Hunt
Image: Goodwill
“It is the ability to find something unique and it is the thrill of the hunt because you actually don’t know what you are going to find. You can say you want to buy a pair of jeans because we do have that, but what you stumble across on your way is really unique and allows you to represent yourself in fashion that is different from other people as it is really a matter of self expression.”
The treasure hunt has become very popular and people are enjoying the thrill of the hunt and want to spend money in a way that reflects their ethical values, Duffin says. Treasure hunting has been seen a lot on social media channels, even live treasure hunting, where someone walks into a thrift store and shows everyone what items they find and how much the original price was. Treasure hunters usually look for vintage items, designer label clothing, old electronics, and more. In Canada, a woman went treasure hunting with her followers and bought a dress that was only $17 to find out later it could be worth up to $10,000 as it was a Vintage Versace dress.
How to Donate
Image: Goodwill
People can donate items at any store as each has a donation center. You have the option to pull up or walk in and someone will receive your donation. The other way is to go to its standalone donation locations where it is used for only dropping off donations and not for shopping.
All storefronts and donation centers are fully staffed as Duffin says Goodwill is not an organization that has a lot of unattended bin collections as they prefer to personally receive the donations from people and to thank them.
“Goodwill is the number one global brand in resale and we have an extensive history as we were founded in 1902, so we have been around a while and this is the opportunity to get on board with that is only a growing trend. Don’t be held back by misconceptions of your grandmother’s thrift store – get on board with the way shoppers are shopping now.”
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