Alo Yoga Opening First International Location in Canada
This week Craig and Lee talk about Alo Yoga’s first international location outside of the United States. The flagship store will replace The Gap at Bloor and Bay Streets in Toronto.
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Uniqlo Hiring Sign at CF Toronto Eaton Centre - Photo by Dustin Fuhs
Staffing shortages will continue to persist, and likely worsen in the near future, straining retailers’ ability to generate revenue during the ongoing COVID-19 pandemic.
Suzanne Sears, President of Best Retail Careers International, said the retail industry was under-staffed going into the pandemic and unable to fill a significant amount of roles by 10 per cent.
Suzanne Sears
“COVID of course turned everything upside down. Currently, most retailers when they came out of wave number three were under-staffed between 20 and 25 per cent. It’s hard to say what the recent lockdowns have triggered but I anticipate the shortages or the vacancy rate will linger at 20 and maybe get as high as 30 per cent,” said Sears.
“There’s a direct measurable correlation between the amount of staff and sales revenue. Retailers have known this for hundreds of years. Each person on the floor is expected to generate X number of dollars. Reducing staff on the floor does not off-set it. It simply means you’ve lost some sales. Now I think retailers are feeling very confident that people will flip to e-commerce if that’s the case but the minute you flip to e-commerce you’re competing with everybody else. The leakage, the ability to jump to a different retailer, is pretty high.
Cluny Hiring Sign in the Distillery District (Photo: Dustin Fuhs)
“So if you can capture a sale in a store that should always be your first choice . . . You’ve got to maintain a minimum store floor presence.”
She said many factors are driving that high vacancy rate in retail jobs.
The first, and most immediate one, is how the Omicron variant of the virus is affecting so many people because it is so infectious. It’s knocking retail staff out of commission and some of them are just sitting out the latest health crisis. They don’t want to risk getting the virus and they are waiting for the current situation to be resolved.
“If you’re working in front-line retail, you’re facing the public all the time. So there’s no end to your exposure and there’s no requirement that your co-workers be vaccinated. So it’s a high risk environment,” said Sears. “So this is why many are saying I think I’ll drop out for awhile.”
Another factor in the labour shortages is that people are re-thinking if retail is the right career for them on every level because it has a tremendous amount of volatility. Here today, gone tomorrow.
7-Eleven Hiring Sign on Bay Street (Photo: Dustin Fuhs)
“The employers can pretty much blame themselves for that one because a good number of them did not offer the support throughout the entire pandemic. If closures came, they simply laid people off. People didn’t hear again from them until they wanted them back. But people then wonder when they close again what happens to them?,” said Sears. “So a lot of people are re-evaluating whether retail is a viable career.”
She said wages in every other sector have increased dramatically and wages in retail are rising a bit but at a “creeping” rate.
“It becomes a risk-reward issue. Would I prefer to go and load boxes at Amazon for $20 an hour, work in the warehouse at Algoma Steel for $25 an hour or work in retail at $17 an hour – that’s pretty much what retailers have been tossing around lately. That’s sort of the average,” said Sears.
“The risk-reward component is iffy. There’s not enough benefits. There’s not enough sick pay. There’s not enough flex. Again, employers are going to have to take a solid look at these issues plus the hours aren’t usually guaranteed. If I’m hired for full-time, next week I might be working part-time and part-time in some cases has dropped down to four hours a week.”
Tim Hortons Hiring Sign (Photo: Dustin Fuhs)
Another factor leading to labour shortages in the retail industry is retirements and people simply quitting their jobs.
“There’s a huge quit factor. In the United States, 20 million people quit their jobs in 2021. In Canada, we don’t know because we don’t really track it as much but if we cut the same percentages as being about 10 per cent of their population, it would mean approximately two million people quit their jobs,” said Sears. “So you ask yourself why would people do that during a pandemic? How bad are things that people would actually quit?
“But it is happening. The work/life balance has always been a problem in retail and retail has been slow to pick up the flexibility factor where people need far more time off or leaves of absences than ever before. And if they aren’t going to get them they simply quit.”
On top of everything, immigration to Canada has been really slow in the past two years.
“Because we don’t have population growth on our own, we look to a huge pool of immigrants coming into the country who often take retail jobs as their first jobs,” said Sears.
“I predict we could be looking at vacancy rates of 25 to 30 per cent midway in 2022.”
Canadian specialty pet retailer Ren’s Pets has announced a continuation of its rapid growth strategy into 2022, which will begin with five new Ontario stores.
Scott Arsenault
The new locations include Orillia, Thunder Bay, Stouffville, Niagara Falls, and Newmarket, ranging from 5900 square feet to 8300 square feet. With these stores starting to open in April, it will bring the total store count for the Legault-owned pet retailer to 43.
“We’re so excited to keep growing the Ren’s Pets brand and adding new stores in amazing communities that are passionate about pets,” said Scott Arsenault, CEO at Ren’s Pets.
“We’ve had several years now of strong growth for our business, and we’re continuing that trend into 2022 with incredible new locations for our customers to visit.”
Ren’s Pets – Milton Grand Opening (Image: Ren’s Pets)
Image: Ren’s Pets
Image: Ren’s Pets
The 2022 additions to the chain will showcase more than 8,000 products over categories that range from dog & cat food, grooming, treats & toys, and 16 doors of 32-foot walk-in freezers for raw & frozen pet food.
“We know there’s a demand for additional physical locations, based on the extensive research we do and the continued growth of pet,” continues Arsenault. “Pet parents are looking for a strong pet bricks and mortar offering, a place they can come in with their pets and truly be serviced along with doing things like weighing their pet, trying samples, asking for advice from our knowledgeable staff, having fittings for harnesses, collars or clothing, and socializing with other pet folks and their pups.”
Ren’s Pets have shifted their new store design to a community-based environment with add-on digital tools that retail brands are implementing to make up for a lack of foot traffic.
Image: Ren’s Pets
Larissa Wasyliw
“Ren’s has truly transformed into an omnichannel powerhouse,” shares Larissa Wasyliw, VP of Ecommerce & Marketing at Ren’s Pets. “We’ve seen our ecommerce business grow extraordinarily, but know our stores are just as important to our customers.”
The brand recently added same-day delivery through a partnership with DoorDash and upgrading loyalty rewards programs that incentivize for repeat business.
“There are already a lot of Ren’s Rewards members in our upcoming new markets of Orillia, Thunder Bay, Stouffville, Niagara Falls, and Newmarket that shop with us now in our current stores or on the website,” said Wasyliw. “We can’t wait to show these pet parents that Ren’s is here for your pet’s best life, providing premium food, treats, and toys in their own Ren’s stores in their communities.”
Founded in 1975, the Guelph-based Ren’s Pets was acquired by the Legault Group in August 2021 and has stores in Ontario and the Maritimes.
Best Buy New Concept for Sherwood Park Mall (Rendering: Best Buy)
Canadian retailer Best Buy is launching a new smaller format store at the Sherwood Park Mall just outside of Edmonton.
Mat Povse
Mat Povse, Senior Vice President, Best Buy Retail & Geek Squad Services, said through the two years of the pandemic people have become much more dependent on technology.
“They’re learning. They’re working. And they’re entertaining and they’re taking care of themselves more at home with the help of tech,” he said. “We’ve become very relevant in that regard. And customers have changed the way they’re shopping with retailers like Best Buy.
“We’ve learned as a retailer we’ve had to really adapt and figure out how we can serve those customers. One of the ways we’ve done that is we’ve asked our stores to do more than they do today. Asked our stores not to just help the customer that walks into the store but also to serve the customer who may not be stepping foot into a store. They’ve become part of the sort of support system for customers no matter how they choose to shop at Best Buy.”
Best Buy New Concept for Sherwood Park Mall (Rendering: Best Buy)
“That means when customers buy online we have that inventory in their neighbourhood at a local store that we can ship from store or we can have it picked, packed and ready for curbside or in-store pickup. And you can imagine now as we think about this change that’s been happening we took a market like Edmonton and said to ourselves how can we continue to serve those customers better in this way with the use of our stores. We also identified that there are areas within Edmonton where we couldn’t actually install a Best Buy store and help serve and make access to customers in a certain community like Sherwood Park- a Best Buy they can depend on.”
So rather than building the same store the company has everywhere else it came up with the concept of the small format store. The store is scheduled to open in a few weeks in 7,700 square feet of space.
“More than half of the store is going to be allocated to warehouse space for inventory and the rest of the store will be allocated to really your traditional retail experience where there’s product on the display but one of the things you’ll notice is it’s going to have a central desk, or a central counter, where customers don’t have to navigate throughout a big store to find services for mobile activations or pay for the products. It’s now all centered in one part of the store,” said Povse.
Best Buy New Concept for Sherwood Park Mall (Rendering: Best Buy)
“Rather than thinking of it as just another standalone store, it’s actually a store that gets added to the network of stores within the Edmonton market and all these stores cooperate together with shared inventory and a market-based approach to serving customers no matter how they choose to shop with Best Buy.”
The company does have one other small format in Canada in Cornwall, Ontario but it was designed in a different time. It too is small and has a warehouse in the back but the new store in Sherwood Park is different.
Best Buy Canada operates 159 retail locations across Canada including big box and Best Buy Mobile stores.
“The store isn’t just a small version of a Best Buy. It’s a store that does everything that Best Buy does. It’s got highly-trained blue shirts in there and you can do all the things you can do in a regular Best Buy store. It’s just much more convenient for you to get to. If you want the much more full-blown experience and walk through vendor displays in a 30,000-square-foot box, you drive 20 minutes and you’re in one of our big box stores,” said Povse.
Best Buy New Concept for Sherwood Park Mall (Rendering: Best Buy)
“If you’re doing an online search and you want to buy that particular laptop and it’s in stock we can have it picked, packed and ready for you in 20 minutes, you show up and it’s there right in your neighbourhood. It’s a complement to our existing network of stores.”
Povse said Best Buy is playing with concepts as well for its existing stores, with inventory stores, and other small format stores.
“What we see here is an opportunity to look at other like markets and play around with our retail model to make sure that we’re building a much more elaborate and complementary ecosystem,” he said.
Future Alo Yoga Location at 60 Bloor Street (Photo: Dustin Fuhs)
Sources are telling Retail Insider that Los Angeles-based Alo Yoga is building a flagship store in downtown Toronto and that the brand has plans to open several store locations in the Canadian market. Alo Yoga will go head-to-head with Vancouver-based lululemon which offers a lower price point and already has extensive name awareness here.
A new flagship store for Alo Yoga is said to be under construction at the northeast corner of Bloor Street and Bay Street in Toronto’s Bloor-Yorkville area in a retail space most recently occupied by the Gap which shut in early 2021. A construction worker on site told Retail Insider that Alo would occupy the majority of the former Gap space which spans three levels and occupied about 17,000 square feet at 60 Bloor Street West. It’s a corner that Maison Birks CEO Jean Christophe Bedos said is the ‘best corner in Canada’ for retail during an interview several years ago.
The price point for Alo Yoga is generally higher than that of lululemon. Alo will likely go after a moneyed consumer so its choice for Canadian flagship makes sense — Bloor Yorkville is a wealthy part of the city with other wealthy residential areas located around it. The area is also growing quickly with thousands of condominium units under construction within a 500-metre radius.
Image: Alo in Austin, Texas60 Bloor Street West in Toronto (Click for Interactive Google Map)
Alo Yoga was founded in Los Angeles in 2007 by entrepreneurs Danny Harris and Marco Degeorge who continue to own and bankroll the business. The company says that it makes “the most technologically advanced yoga clothing in the world” with a “studio-to-street” ethos. Home workouts are possible with Alo Moves, an at-home fitness concept with a $30 monthly membership for unlimited yoga, fitness and meditation. The company has a non-profit called Alo Gives which it says will introduce millions of kids to yoga. Each week classes are shared on YouTube for free.
The retailer also operates Alo House experiential pop-ups which could come to Canada to help grow brand awareness and to engage with consumers. Alo is also getting into the music scene according to WWD, including a new recording studio in California.
Alo Yoga only has 13 stores, all of which are in the United States. Four of the stores in the NYC and Los Angeles markets feature yoga studios. Canada marks the first international expansion for the company which WWD reported is also looking at moving into the Middle East. Given the size of the new Toronto flagship, a studio might also be added to the space.
In an exclusive article in WWD, Alo co-founder and CEO Danny Harris said that the company is looking to open about a “half a dozen” more stores including Toronto and possibly a partner store in Dubai later this year.
“We have more [stores] coming, but we’re not really sure exactly how many more,” Harris said. “We’re a digital company first. So how many more stores that justifies, we’re not sure. We’re going to eventually go to major cities in Canada and to major cities all over the world,” he continued. Global centres including London and Paris are also among the targets.
Image: Alo Yoga Newport Beach
Image: Alo Yoga Newport Beach
Only one of the US-based Alo Yoga stores is located within an enclosed shopping centre, possibly providing an indication that future Canadian stores will be on urban street front locations. In the United States, several of Alo’s stores are in upscale outdoor strip malls, something less common in Canada because of the weather.
In Canada, one might guess that Alo will target the Vancouver market for a store, most likely in the downtown core on or near Robson Street or in the Kitsilano/Fairview areas on either West 4th Avenue or South Granville Street. A Montreal location could also be on the way either downtown or on a posh retail street address in Westmount. And in Toronto, a second storefront could be expected at the Yorkdale Shopping Centre, given its strength in attracting brands and consumer dollars.
It’s unclear what impact Alo Yoga’s entry into the Canadian market will have on lululemon. Alo is already distributed in Canada in several multi-brand retailers including Hudson’s Bay, La Maison Simons and even Indigo has some items on its website. Given that there are only 13 stores in the United States, it’s more likely that Alo will carve out extra market share in major markets with stores while lululemon will likely continue to dominate given its sheer size and store presence.
Alo Yoga will also compete with Gap-owned Athleta which has already opened two Canadian stores in Vancouver and Toronto. Athleta’s pricer point is lower and the brand focuses on women. Sources told Retail Insider in 2021 that Athleta had been a contender to lease the former Gap space on Bloor Street in Toronto, along with several other retail brands that bid on the coveted space. In the past, Montreal-based Lole was also looking at making inroads into lululemon’s market share but the retailer’s parent company went bankrupt in the summer of 2020. And speaking of lululemon, the retailer is said to be exiting its Cumberland Street location for a flagship store on Bloor, with details to follow.
Chopard Vancouver Boutique at 1108 Alberni Street (Image: Chopard)
Swiss watch and jewellery brand Chopard has relocated its Vancouver storefront to 1108 Alberni Street in the city’s Luxury Zone. The new storefront replaces a former location nearby at 925 West Georgia Street.
“Chopard is proud to unveil a beautiful jewel in Vancouver,” said Caroline Scheufele, Co-President and Artistic Director of Chopard. “We’ve been welcomed with open arms and remain committed to this important, growing and vibrant market in Canada. We look forward to welcoming friends of the Maison to our new home, one that embodies and showcases the creativity, innovation and craftsmanship that Chopard is known for.”
Chopard Vancouver Boutique (Image: Chopard) Chopard Vancouver Boutique (Image: Chopard)
The store’s design includes light wood floors and wall paneling as well as luxurious fabrics and furnishings that the brand says artfully reflects the feeling of a family home. The store features Chopard’s Haute Joaillerie and Precious Lace creations alongside the iconic L’Heure du Diamant, Happy Diamonds, and Ice Cube collections. A ‘gentlemen’s area’ at the back of the store features rich shades of leather and an extensive library.
The Vancouver store is Chopard’s only standalone streetfront boutique in Canada currently — the brand also has a boutique presence at CF Sherway Gardens in Toronto at jewellery retailer L’Oro.
Chopard Vancouver Boutique (Image: Chopard)
Vancouver-based Global Watch Company (GWC) operates the new Chopard boutique which spans 743 square feet and is contained in part of a retail space formerly occupied by womenswear retailer Blubird. A new Tudor boutique occupies the remainder adjacent to Chopard.
The lease for the new Chopard storefront was negotiated by Mario Negris and Martin Moriarty of Marcus & Millichap. QuadReal is the landlord for the 745 Thurlow office building where the new luxury boutiques will be located. The same building is also home to a recently opened Thom Browne storefront (which replaced Versace) and a Brunello Cucinelli store which opened in 2017.
The most unprecedented issue for retailers in 2021 was the swift onset of supply chain challenges at almost every node of the system, faced by manufacturers and retailers around the world, says the Retail Council of Canada.
“Retailers put in place contingency plans to maximize the likelihood of products making it to store shelves by ordering earlier, increasing inventories and diversifying suppliers and product mixes. As a result, there was almost always plenty of product on the shelves, but product delays, shortages of specific brands and models, along with rising prices, are expected to continue well into 2022,” said the Council in a recent report.
“Expect to see retailers examining what they can do to adjust their supply chain to bring it closer to home. Approaches such as more strategic sourcing options in North America, along with different strategies to pre-order inventory, move goods and replenish stores, will be considered to manage ever increasing supply chain challenges.”
John Graham
John Graham, Director, Government Relations (Prairie Region) for the RCC, said supply chain has been a challenge for retailers during the pandemic and distorted how retailers marketed and sold products throughout the holiday season.
“There were lots of efforts to order early, direct deliveries from overseas deliveries, and what they were promoting from Black Friday right through Boxing Day,” said Graham. “There was lots of adapting as retail is used to doing.
“The expectation is that at least for the first half of 2022 these delays are going to continue. There will be shortages of hotly demanded items and products and we’re also going to see inflation as you’re seeing in lots of different sectors. All that will make the importance of the supply chain that much more important to manage costs, to source as locally as possible within North America and to do what you can to adjust to how you inventory products. Maybe not have a lot of products tied up in a whole bunch of stores but better leverage your online platforms for larger stores.”
The RCC report said retailers are also concerned with the rippling effect throughout the supply chain, especially in transportation, which is compounding the problem of labour shortages. Some retailers are starting to see inbound shipments to their distribution centres slowed due to drivers from vendors off sick.
“With the vaccine mandate for truck drivers coming into effect on January 15, 2022, trucking associations have forecasted that a significant number of truck drivers will stop all cross-border travel, which RCC fears will result in another spike in freight costs as well as further disruption to supply chains,” said the organization.
With an update on Wednesday evening, Canada Border Services have confirmed the upcoming mandate that would have affected Canadian big-riggers who were unvaccinated or single-dosed with a quarantine order will not be implemented. The new information provided indicates that the rule will still apply to American truckers, who will be turned away at the border without proof of vaccination as of January 15th.
“The ongoing challenges show that as an industry, we still have a long way to go to return to pre-pandemic “normality.” Yet, while the trials of 2021 were significant, we hope that by continuing to work closely with public health officials and governments across the country – and with strong support from our customers – retailers will get through 2022 and beyond.”
Graham said truck transportation is such a critical component of both brick and mortar retail and ecommerce retail. If there are a number of truck drivers that won’t be crossing the border, there are concerns that this will create an additional spike in freight and further disruptions because of fewer drivers being able to transport goods across the border.
The RCC said labour shortages also dogged retailers throughout 2021 and are increasingly becoming problematic today. Retailers are currently reporting employee absenteeism up to 20 per cent due to the Omicron variant, it said.
“A lack of available testing is intensifying the problem. Retailers continue to respond to systemic staff shortages with a variety of strategies including incentives, compensation, signing and retention bonuses and innovative recruiting tactics as well as, where appropriate, self-service technology in the stores. We expect to see ongoing labour shortages persist, especially if consumers continue to turn more to ecommerce and online shopping, both of which can require adjustments for staffing in distribution warehouses, customer service centres, IT, and transportation infrastructure,” added the RCC.
“When you lose one fifth of your workforce it makes it very challenging to operate,” said Graham. “We’re seeing stores that are having to close departments and in some cases close entire stores if they’re reliant on a small group of maybe family or a small group of workers in that business.”
Graham added that for retailers in need of specialized skilled workers it’s disruptive at an operational level because it’s hard to replace higher skilled labour.
RCC said retail is Canada’s largest private-sector employer with over two million Canadians working in the industry. The sector annually generates over $78 billion in wages and employee benefits. Core retail sales (excluding vehicles and gasoline) were over $400 billion in 2020. RCC members represent more than two-thirds of core retail sales in the country. RCC is a not-for-profit industry-funded association that represents small, medium, and large retail businesses in every community across the country. It represents more than 45,000 storefronts in all retail formats, including department, grocery, specialty, discount, independent retailers, and online merchants.
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.
Square Canada has launched an on-demand delivery service through a third-party delivery partner for orders placed directly on its website with no commission fee.
The delivery service for orders, through DoorDash Drive, is geared for restaurants, bars, breweries, bottle shops, convenience stores or any seller using Square Online across Canada.
Canada is the first international market to offer on-demand delivery since its US launch in 2020.
Image: Boke Bowl QSR
Justin Scott
“We’re super excited that we’re introducing a brand new way for Canadian sellers to get reliable delivery without the marketplace commissions using our on-demand delivery,” said Justin Scott, Head of Product, eCommerce Platform at Square.
“What that means is that when you start up a free Square Online ordering page you can get access to on-demand delivery which is really a cost-effective way to get items delivered to your customers. This is the first international market that we’ve launched this service in since we launched in the US back in 2020.
“It’s a great time for this because we know it’s a super challenging business environment right now. We hear that from our sellers all the time. And so we want to give them the tools. The biggest thing that sellers will notice is saving on commissions. Typically for marketplaces for food orders and those sorts of things sellers end up paying around 30 per cent in commission fees. With our on-demand delivery service, sellers can save a pretty significant amount because they only pay the flat fee of $1.50 Canadian to Square and then they pay a flat fee for the courier provided by DoorDash as well. Both of those fees can actually be passed on to the buyer if that’s what the sellers want to do. We give sellers a lot of control and flexibility over how they price and pass those fees along to customers.”
Scott said sellers can also own the relationship with their customers. If a customer places a direct order with the seller online, the seller gets to own that customer relationship. They get all the customer information which is added to their customer directory and they can use that to continue building and growing their business. They could set up a Square Loyalty program for rewards. They could use Square Marketing to retain and encourage that customer to come back.
“Building that customer relationship is a key differentiator as well,” added Scott.
He said the new service is available to all of Square’s sellers across all the provinces and territories with the exception of Nunavut. So hundreds of thousands of businesses across the country have access to this.
“When we launched this in the US back in 2020 we saw 173 per cent growth year-over-year between June and December 2020 and last year. So we really expect to see a high level of uptake for this service in Canada as well,” explained Scott.
“One of the biggest drivers has really just been, in the case of restaurants, delivery has been providing a lifeline to restaurants during the pandemic allowing them to stay open even when indoor dining has been closed in many places. We’ve really just seen demand for this take off.”
Wilson Shin, the owner of Katsupan Japanese Sandwich in Toronto, Ontario, has been one of the early adopters of on-demand delivery through Square Online in Canada and welcomes the service as a way to reach more customers.
“I think it’s great that Square can now offer a delivery option for customers who buy online, right alongside pickups, as the choice is right in front of them,” said Shin. “The service has been easy to use, which is always important. Overall, it’s a good option for recurring customers and it helps me save on fees as well.”
David Rusenko
David Rusenko, head of eCommerce at Square, said the company is excited to offer a new solution for Canada’s food and beverage industry to get the most out of its businesses in 2022.
“Whether that’s a bakery delivering food to customers, a restaurant monetizing its wine cellar, a grocery store supplementing their on-premise sales, or a local brewery introducing old favourites to a new crowd, we’re proud to provide our sellers with more ways to make money,” 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 24 hours.
