Future Daniel's Chai Bar at Vaughan Mills (Image: Daniel Lewis)
Brampton-based Daniel’s Chai Bar has announced a new pop-up location which will be opening at Vaughan Mills near Toronto on March 1st, 2022.
This will be the second location for the quick service beverage concept, which opened its first store at Bramalea City Centre in late 2021 under the new branding of ‘Daniel’s Chai Bar’. The founder’s former brand was called ‘T by Daniel’ and that was retired during the pandemic as a shift towards the new franchise model.
“This is the beginning of an extensive growth plan for Daniel’s Chai Bar in which we will pop-up in specific retail locations, test the market and if the demand and LOVE is there… we will push for a permanent deal,” said Founder Daniel Lewis.
Rendering: Daniel’s Chai Bar (Vaughan Mills)
Future Daniel’s Chai Bar at Vaughan Mills (Image: Daniel Lewis)
Future Daniel’s Chai Bar at Vaughan Mills (Image: Daniel Lewis)
Daniel Lewis
Daniel’s Chai Bar has signed a three-month long lease with Vaughan Mills in a vacated Starbucks located near the Legoland Discovery Centre. With Starbucks having consolidated its operations in the mall to a single location, the second location has been converted into a valuable pop-up asset.
The Vaughan Mills Daniel’s Chai Bar location will feature an enhanced menu of offerings and has given Lewis, the Tea Jedi of Daniel’s Chai Bar, an opportunity to test new concepts and store layout designs.
Lewis has also announced that the brand will be opening up a pop-up location at Square One Shopping Centre in Mississauga and has extended its lease at Bramalea City Centre for an additional six months.
SAKS OFF 5th at South Edmonton Common Closing (Image: South Edmonton Common Facebook)
Hudson’s Bay Company off-price chain Saks OFF 5TH is shutting its store at South Edmonton Common this year after opening there over five years ago.
The 32,000 square foot store opened in September of 2016 in South Edmonton Common which is one of North America’s largest open-air retail developments, and is owned and operated by Cameron Development Group.
SAKS OFF 5th at South Edmonton Common Closing (Image: South Edmonton Common Facebook)
It was the first OFF 5TH location in the Edmonton market with a second location opening at the Skyview Power Centre in April of 2017.
“After careful consideration, Saks OFF 5TH has decided to close its South Edmonton location,” shared Saks OFF 5th. “Through the regular course of business we continually evaluate store performance and other factors, and, from time to time, may determine it necessary to close a store. We expect this store to close to the public in April 2022. Customers can continue to shop with us at Saksoff5th.com and at our other locations.
We are committed to offering support and assistance to our team impacted by the closings. Eligible associates will receive appropriate employment separation packages and transfer opportunities will be explored where feasible.”
SAKS OFF 5th at South Edmonton Common Closing (Image: South Edmonton Common Facebook)
Saks OFF 5TH entered the Canadian market in 2016 with plans for about 25 stores. Between 2016 and 2018 the retailer opened 18 stores in Canada and then halted the expansion — some landlords said that the retailer had been struggling in terms of sales with some locations selling less than $100 per square foot annually. Product in Saks OFF 5TH includes a range of brands and merchandise picked specifically for the outlet as well as some private-label merchandise and some clearance items from Hudson’s Bay stores, including pieces from luxury department The Room.
Saks OFF 5TH currently has stores in the Vancouver, Calgary, Edmonton, Winnipeg, Ottawa, Toronto/Southern Ontario, Montreal and Quebec City markets.
The retailer competes with other off-price retailers operating in Canada including TJX banners Winners and Marshalls as well as Nordstrom Rack which entered Canada with its first stores in 2016.
So far only the South Edmonton Common Saks OFF 5TH location is confirmed to close, though we’re hearing that more closures could be coming and we’ll be providing updates.
Friggitello at 79 Kensington Avenue (Image: Dustin Fuhs)
So whatever happened to the so-called retail apocalypse that so many people expected to take place as a result of the devastating economic impact from the COVID-19 pandemic?
Despite a tumultuous time in the past nearly two years, and upheaval everywhere, caused by lockdowns, closures and strict public health measures, many retailers have weathered the storm and the number of bankruptcies across the country is nowhere near what some experts had forecast.
However, is there a day of reckoning coming when government support programs inevitably come to an end? And perhaps the overall statistics also don’t account for many of the smaller businesses who simply shut their doors and didn’t file officially for creditors’ protection or bankruptcy.
McEwan Yonge & Bloor Closed (Image: Dustin Fuhs)
Michael Kehoe
“The predicted 2021 retail apocalypse never happened, however, there were obvious winners and losers on the Canadian retailing scene,” said Michael Kehoe, a Calgary-based commercial real estate broker with Fairfield Commercial Real Estate and a spokesman for Consumer Real Estate Canada. “Home fashion, furniture and junior women’s apparel excelled while other categories weren’t so fortunate as they were confronted with staffing and supply chain issues amongst other challenges.
“We witnessed a definite thinning of the pack as a number of retail chains entered court protection, consolidating locations or folded all together.
Many retailers avoided bankruptcy with the temporary cooperation of their suppliers, lenders and / or landlords. By kicking the proverbial can down the road, future survival or success is not assured as many landlords are playing it tough on lease renewals or extension of rent reductions often taking spaces back to be recycled with new tenancies.
“2022 will be a pivotal year as many new retail ventures emerge and new retailers enter the Canadian market. Retail is always evolving and changing especially in this unprecedented time of disruption and opportunity.”
According to the most recent report in November from the Office of the Superintendent of Bankruptcy Canada, business insolvencies for the 12‑month period ending November 30, 2021, decreased by 15.4 per cent compared with the 12‑month period ending November 30, 2020. The two sectors that registered the biggest decrease in the number of insolvencies were retail trade and accommodation and food services. Finance and insurance; and administrative and support, waste management and remediation services experienced the biggest increase in insolvencies, said the report.
The retail sector experienced 196 bankruptcies in 2021 until the end of November, which was down 29 per cent from the 276 for the same period the year before. The number of proposals, which is an offer to creditors to settle debts in a formal agreement under the Bankruptcy and Insolvency Act, fell by 53.4 per cent to 54 compared to 116 the previous year.
Henry Louis
Henry Louis, Editor of the Insolvency Insider publication, said many government programs, including wage and rent subsidies, “have propped up a lot of businesses.”
“Additionally lenders have been holding off from calling in non-performing loans. As such, companies have not yet needed to resort to filing for creditor protection or declaring bankruptcy,” he said.
“We just did a survey in which the overwhelming majority of insolvency professionals are predicting more insolvency filings this year. The government subsidies are ending and lenders are starting to take action, though it will likely take a few quarters to see an increase in filings. What also does not get reflected in the statistics is the number of small businesses that just informally close and never reopen. If I had to guess, this is a very big number in Canada.”
George Minakakis, principal of Inception Retail Group Inc. and author of The New Bricks & Mortar – Future Proofing Retail, said the human retail story is that the future only rewards the bold.
George Minakakis
“When 2020 arrived many of us were expecting more store closures. A spill of 2019, if you will. By March 2020, there was a stay of execution on that fallout. Because of the abrupt impact of the pandemic, the government was introducing subsidies through loans. However, let’s be realistic. We had a spillover in 2020 with bankruptcies and restructures. The timing was right to expose vulnerable and weak businesses large and small,” he said.
“Like Le Chateau which filed for bankruptcy and ultimately was acquired to relive as an online business. And Reitmans, which recently emerged from its restructuring. I believe these are the lucky ones. There are a plethora of small retailers that have not been so lucky and have closed their doors silently. Meaning they could not afford bankruptcy or a restructure. And some mid-large retailers may have had some sort of business transformation into the digital world. We have no evidence that this was enough to keep them competitive.”
The challenges for many retailers are not over. Current events, inflation, supply chains, higher interest rates, and more of the virus lead to a potential consumer slow down.
Closed ALDO Shoes (Image: Dustin Fuhs)
“The equity markets are reacting to that right now, in the technology sector primarily. In other words, the gold rush with existing businesses who could pursue digital transformations is predominantly complete,” said Minakakis. “All retailers face these challenges and whoever was on edge at the beginning of 2020 needs to start repaying government loans and competing without a safety net.
“Now we enter a stage for retailers to prove they are competitively sound and positioned to survive. Over the next three to four months, a tough but true story will begin to surface from the shadows of government subsidies into the real economy. The strategic choices of retailers will allow them to fly and be first in the market, or fade.”
Bruce Winder
Bruce Winder, author of RETAIL Before, During & After COVID-19 and president of Bruce Winder Retail, said several retailers, specifically small to medium sized retailers, are surviving from government loans and in some cases grants.
“These programs are literally keeping them solvent. Others have been able to reduce operating costs to survive on a lower revenue base. Finally, some have pivoted to e-commerce to offset in-person sales and have used marketplaces to increase virtual footfall,” said Winder.
“Once Omicron fades and hopefully the pandemic becomes an endemic, retailers will need to adjust to a new normal while paying back significant debt in many cases. Sadly, I think we will see more retailers leave the industry at that time when subsidies are eliminated. Of course the silver lining is that new retailers will emerge from the ashes.”
The burgeoning e-commerce retail sector has sparked an insatiable demand for industrial real estate across Canada with companies constantly in search of warehouse, distribution and fulfillment space.
In many of the major Canadian markets, such as Vancouver and Toronto, available space is at a premium and hard to come by with developers launching new construction to try and keep up with the demand.
Marshall Toner, Managing Director/National Lead, Industrial for JLL Canada, said the rhythm of consumer purchasing has changed – their behaviours and expectations.
“Their expectations are speed delivery, competitive prices and in some regards free shipping. That has made companies shift from traditional bricks and mortar to more warehousing type solutions. So the retail footprint has gone down and the industrial footprint went up to satisfy the consumer expectations,” said Toner.
“Some would argue that e-commerce requires three times more logistics space than when you have a traditional retail model. So as we gravitate to more and more and more e-commerce, all that product that was in the whatever brand store you want that footprint shrinks and the industrial footprint goes up.”
Warehouse Robotics
Toner said e-commerce has also created a different type of distribution centre because companies need high power for all the robotics in some cases and they like higher ceiling heights.
“In some of these fulfillment centres, we never used to see giant parking lots on the side of a distribution centre because the amount of staff inside was fairly minimal, but now if you look at an Amazon or someone like that, similar to that, they have a high degree of personnel working there so they need more parking and you never used to see that,” he said.
“Another significant change is reverse logistics. What do we do with all of the returns? So now we have companies that are in the reverse logistics business, that are independent of whoever the retailer is, opening up warehouses where they have all the returned goods for sale in there at a discount – or handling the returns for the retailers in some shape or form which takes space.”
Toner’s career in the real estate industry is about 30 years and the veteran said he has never seen the demand and low availability of space like it is now.
“It’s across North America. Industrial vacancy in Vancouver is sub one per cent. Calgary it’s now sub three per cent. Toronto is between one and two per cent. Montreal just over one per cent,” said Toner. “E-commerce is driving a lot of this. It really is. E-commerce has a bunch of ancillary businesses that come with it.”
In its Q4 2021 industrial real estate market report, JLL said vacancy in Vancouver dropped another 30 basis points in the last quarter of 2021, recording a historic low of 0.7 per cent – the first-time vacancy has recorded below the one per cent mark.
“The lack of supply in Metro Vancouver has also resulted in users being redirected to other markets, mainly Calgary, to fulfill their demands. Due to historic pent-up demand, Greater Vancouver has seen a 22 per cent increase in under construction space since the last quarter totaling just over eight million square feet,” said the report.
“With a year of quarter-over-quarter historic lows, vacancy is expected to continue decreasing through 2022 despite a strong development pipeline. The projected deliveries of strata and mixed-use industrial space in the coming year will continue to play a role in accelerating rental rates and will further diversify the tenant mix of industrial space.”
There is also just over 11.2 million square feet under construction.
“Vacancy is expected to remain at or near historic lows throughout the year. The relatively strong construction pipeline will likely do little to alleviate current market conditions. Furthermore, continued supply chain issues and rising costs for building materials will likely continue for much of 2022 and intensify both construction delays and rising occupancy costs,” said JLL.
Toner said at some point some sort of critical mass will be reached.
“For retailers, in satisfying consumer demand, at some point they’re going to get to some sort of concentration where it isn’t necessary for them to continue to acquire or lease the premises that they have been at the same velocity. I think the velocity will slow down in time. I just don’t know what that time period is,” he said.
This year is already starting off strong with five international brands opening first-to-Canada stores in January of 2022, and more on the way. Brokers are saying that this could be a banner year as retail becomes more global and Canadian cities are a target.
It’s encouraging news and shows confidence in the market as brands look to major cities to enter the Canadian market. We recently tallied a total of 21 international brands that entered Canada in 2021 by opening stores, including a breakdown of launch cities where Toronto was the primary focal point last year.
In January of this year, several international brands have opened first-to-Canada stores. Swedish designer/manufacturer of roof racks/carriers Thule opened its first Canadian storefront at Park Royal in West Vancouver. We reported that Vancouver-based retailer Rack Attack was opening the store in a retail space with an expected December opening date extended into January.
In Vancouver as well, Paris-based fashion and music brand Maison Kitsuné opened a combined retail space and café in the city’s Gastown area, marking the first location for the popular brand in Canada. More locations are expected to open with the Toronto market expected to be a focus.
With two international brands already opening first-to-Canada stores in the Vancouver area this month, the city only needs one more opening to match the three openings seen in 2021. We reported earlier this month that the greater Toronto area was home to 13 of the 21 international brands that entered Canada last year by opening stores.
In Ontario, three international retailers opened first-to-Canada stores over the course of January 2022. That includes US-based Carlo’s Bake Shop which opened its first Canadian location in the Port Credit area of Mississauga with more locations to come. At Toronto’s Yorkdale Shopping Centre, New York City-based Marc Jacobs opened its first Canadian storefront in the mall and more are said to be on the way — the new store concept features a price point on bags similar to what one might find at Hudson’s Bay. And in St. Catharines Ontario, a first Canadian location for Nigeria-based grocery chain Prince Ebeano opened in the city this month as well.
Brokers are telling Retail Insider that several more international brands are already confirmed to be entering the Canadian market by opening storefronts. We’ll reveal these throughout the year as we continue to report on the industry. It’s an encouraging sign for the retail industry which was clobbered by the pandemic. Consumer confidence is coming back and some retailers, including luxury brands, are in some cases seeing higher sales now than in 2019.
Already, we know that retailers such as Lafayette 148, Anne Fontaine and Paris Baguette will all be opening first-to-Canada locations on Bloor Street West in Toronto. We’ll be discussing other brands such as Acne Studios and Diptique which among others will open first stores this year as well.
Retail Insider will be tallying international retailers entering the Canadian market in the coming months as well as other retailers opening and expanding in this country. We will be showcasing this in a new portal that will be part of the must-read Retail Insider the magazine which is launching this spring, with more details to follow.
The 2021 Holiday Shopping Report, by Salesforce, a global leader in CRM, indicates consumers spent $1.14 trillion online globally and $257 billion in the U.S., compared to $1.1 trillion and $236 billion in 2020.
Rob Garf
While Cyber Week saw muted digital growth in 2021, early November and late December surges helped retailers break new sales records.
“Despite the lingering pandemic and countless obstacles such as supply chain logistics, low inventory, and fewer discounts, consumers flocked online to close out this holiday shopping season with a bang,” said Rob Garf, VP and GM of Retail, Salesforce.
“As we move into a new year, retailers must push their brands to platforms such as social, gaming, messaging, and the metaverse to engage shoppers where they are discovering and buying products. They must also double down on efforts to reimagine physical stores to support continually changing digital experiences.”
Canadians shopped early this holiday season: In an effort to beat the retail rush and avoid late shipping, Canadians began holiday shopping earlier. This season, 19 per cent of Canadians began their online shopping during the first week of November, a six per cent increase year over year;
Cyber Week looked different in 2021: Online orders in Canada decreased by 14 per cent year over year during Cyber Week. Pre-Cyber Week online shopping also decreased by 22 per cent, and post-Cyber Week online shopping decreased by 18 per cent;
Shopping Carts were affected by inflation and supply constraints: Merchandise prices in Canada grew by six per cent year over year in December 2021, causing basket sizes to drop by approximately 10 per cent; and
Canadians financed the holidays: From credit cards, to gift cards, to PayPal, Canadians predominantly financed their transactions over the holiday season. In fact, there was a 92 per cent increase in buy finance transactions year over year. Apple Pay followed, with a 39 per cent increase in transactions year over year.
Garage Pop-up on Queen Street West (Image: Dustin Fuhs)
Garf said it was a really interesting holiday shopping period.
“There was a new holiday calendar that emerged. In the past, decades upon decades, holiday was really focused around some tent pole moments most of which by the way were manufactured like Cyber Week in the States that was coined by the National Retail Federation as a way to really signify people going back to the office, getting high speed connectivity and because of that demand was being created,” said Garf.
“So consumers, given that, were really conditioned to wait for these big holiday peaks to get the best and biggest discounts. What we saw this holiday season is more a smoothing out of demand which started earlier in the holiday.
“Last holiday season, the headline was all about the last mile. How are you to get products to the doorsteps? This year was as much about the first mile. How are you getting products in through the ports to the inbound supply chain through the retailers’ distribution network and ultimately to the customer? And because of that, retailers started to promote, as they always have, and they stuck to their promotional calendar, and consumers really engaged and they took the bait. They saw headline after headline of increases of pricing, decreases of inventory, and they purchased earlier.
“In Canada, while it was a somewhat muted holiday season. For the first week of November we saw a 19 per cent year over year increase in digital sales and it was because consumers really started their shopping journey and clicked the buy button earlier than ever.”
Chapters Online Order Sign (Image: Dustin Fuhs)
Because of supply chain issues and uncertainty around inventory and pricing, Garf said consumers were paying a six per cent higher retail price compared to the year before as well as fewer discounts.
“Retailers didn’t feel compelled that they had to promote early and often and throughout the holiday. They were really sticking to their initial promotional calendar and it worked,” said Garf.
The Salesforce global report found stores played a critical role this holiday: While consumers continued to embrace digital this holiday, physical stores proved to be key throughout the shopping season. In fact, 60 per cent of global digital sales were influenced by brick-and-mortar – from generating to fulfilling demand. The evolving role of the store – and associates – helped to break down friction across digital and physical touchpoints, it said.
“While we’ve seen a surge in the last two years in digital, largely because we’ve lived our lives in digital whether it’s shopping or entertainment, dining, meetings, education, the store doesn’t go away,” said Garf. “In fact, the store becomes more important, and the store associates who are the biggest brand ambassadors.
“Sixty per cent of digital orders over the holidays were influenced by the store – whether demand was being generated from the store because associates were on social media, or associates were fielding emails, texts or calls either at home or in the store, rather than just a service agent, or demand was being fulfilled from the store, whether that’s buying online, picking it up at store.
“The store is now the critical component of your digital business. We talk about obviously the surge in digital and we have a lot of data at Salesforce . . . but the store becomes even more important than ever.”
Food service establishment barBurrito, which began with its first location in 2006 in Toronto, has grown to 158 restaurants today with plans for massive expansion across the country.
Shawn Saraga
Shawn Saraga, VP of Global Development for barBurrito Restaurants Inc., said another 15 locations are currently under construction and 80 more on the way that are already signed with paper ready to go in the Canadian market.
President and Founder Alex Shtein started to franchise the business in 2009 and it has taken off since then.
The brand has also opened one location in the US and another four are currently under construction. It is in the process of developing opportunities in New Jersey, New York, Florida, California and Delaware. The first location in the US was in Howell, Michigan, in August 2020.
Saraga said the company expects to open 51 new locations in Canada this year and another six in the US.
He said the Canadian market could eventually grow to 400 to 500 locations. The US market could be more.
Image: barBurrito
“It’s based on finding the right locations. For us what matters more than the speed of opening is finding the best locations. So if it isn’t the best location we’d rather not do it,” explained Saraga.
“We’re looking for 1,000 to 1,300 square feet of space in grocery-anchored shopping centres, Walmart and Costco style power centres. We like lots of parking, lots of visibility and lots of frontage. With us what matters is we’re looking for a population base of anywhere from 15,000 to 30,000 people (in the trading area). I will say the small towns have done incredibly well for us. We’re doing great numbers in small towns because of the lack of competition that exists there and our ability to get a first to market position.
“If there’s any market we’re targeting this year it would definitely be Montreal for growth. We’re very interested in the Montreal marketplace right now and the Greater Montreal Area. That is an untapped region for us and we’ve already confirmed our first location to be opening up in the Montreal area in Mont Royal and we’re about to secure our second location and are very actively looking for people that want to help us expand in the Greater Montreal Area.”
Saraga said the company’s target for growth is also the Vancouver market with about 16 new stores opening this year in the Greater Vancouver Area.
Image: barBurrito
Before the pandemic hit, the lowest sales in the chain were about $400,000 a year with the highest $1.6 million. When the pandemic hit, Shtein, the founder, took immediate action to help support the franchisees.
The first thing he did was waive 100 per cent of royalties to all stores. For traditional stores they were waived for nine weeks and for non-traditional food court locations it was 22 weeks, giving up about $1 million in revenue to help the stores succeed.
Shtein also set aside about $250,000 of his own cash as a relief fund to help support the most vulnerable stores.
“After that we got on the phone with landlords across the country and personally re-negotiated the rents and got the CECRA (Canadian Emergency Commercial Rent Assistance) in place for all of our locations and we were successful in 99 per cent of the cases,” said Saraga.
Image: barBurritoImage: barBurrito
The brand also connected with corporations to sponsor burritos and bowls that were sent out to frontline health care workers during the height of the pandemic. More than $70,000 worth of food was sent out.
The company also renegotiated rates with Uber Eats, Skip The Dishes and Door Dash, reducing rates and boosting marketing.
“As a result, through April, May and June of 2020, our sales were flat. We saw no decrease at all,” explained Saraga. “In fact, for the rest of 2020 all through 2021 and now coming into 2022 our sales have been up 15 to 20 per cent. So now our highest sales in the chain are $2.2 million. Our lowest are still at $400,000 because those are the food courts that are struggling during COVID. And our average store sales are between $600,000 to $650,000 a year.”
Saraga said the quality of the product is excellent, adding that barBurrito has the highest Yelp reviews in the industry.
“We offer more proteins and more healthy food options than any of our competitors. We’re perfectly priced in the $10 meal category with the average guest’s check coming in at $16.55. We offer phenomenal support to our franchisees. We’ve ensured that they weathered the storm of COVID extremely well to the point now that 40 per cent of our franchisees own more than one unit. And we’re continuously growing and innovating and improving the brand,” he said.
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 three days.
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.
