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Pandemic Mental Health Crisis Hits the Canadian Retail Industry: Analysis

As cities and communities in provinces and territories across the country continue with gradual progress toward a full reopening, retailers and other businesses are busy fine-tuning their environments as they welcome more eager shoppers back into their physical spaces. With the reopening, which has been awaited patiently by retailers and consumers alike for more than 16 months now, there comes an anticipation and excitement, perhaps even exhilaration for some, at the prospect of returning to society as we knew it; to once again socialize, engage and enjoy the full value of community. However, as those operating within the industry prepare to ramp up their efforts in order to provide the unique and inspiring experiences that brick-and-mortar retail is known for, it’s being suggested in many circles that special attention ought to be paid to the frontline retail employees who support the execution of those experiences and the ways in which their mental health may have been negatively impacted by the strains and pressures of the pandemic period.

“There is no doubt that the pandemic has taken its toll on employees working across a variety of industries, including retail frontline workers,” recognizes Katharine Coons, National Workplace Mental Health Specialist at the Canadian Mental Health Association (CMHA). “While many were able to quickly shift to a remote work environment virtually overnight, retail remained open which had a profound impact on employee mental health and wellbeing. We still don’t fully understand all the factors that are at play because the retail industry is still being impacted. We’ll have to wait for research to come out as soon as these unique and challenging times pass. The research we’ve seen at the CMHA so far suggests that fears and risk of contracting the virus, job instability and lack of permanent work, uncertainty and the unknown, isolation and customer demands have all played a role in having a negative impact on the mental health of retail frontline workers.”

Mental health on the decline

Although, as Coons points out, there is very little in the way of research and surveys that have been conducted and completed around the impacts of the pandemic on frontline retail employees, preliminary polling data concerning the impacts on those living in Ontario – perhaps the hardest hit province in the country – provides a glimpse into the severity of the issues concerning the mental health of both in-store and office employees. Commissioned by the CMHA, Ontario Division, numbers released in March of this year show that only a third of Ontarians (35 percent) consider their current state of mental health as ‘very good’ or ‘excellent,’. This represents a significant decrease from 52 percent as recorded in May of 2020. In addition, nearly 80 percent of Ontarians now believe we’ll be in a serious mental health crisis post-pandemic, up from 66 percent in August of last year. The poll highlights the significant effects that feelings of isolation and loneliness have had on people with 36 percent of Ontarians saying they’re experiencing very high or high stress (up from 30 percent in August), 35 percent feeling very high or high anxiety (up from 30 percent in August) and 17 percent admitting to always or very often feeling depressed (up from 13 percent in May).

“Employee mental health has long been one of the most important and common issues facing workplaces,” asserts Coons. “Every week at least 500,000 Canadians miss work due to mental illness. We all bring our mental health to work with us, we can’t just leave our concerns at 9 and pick them up at 5. The pandemic has, however, helped push mental health into the spotlight. It’s no longer a nice-to-have but a need-to-have for organizations. According to CMHA research conducted with UBC 41% of people in Canada say their mental health has eroded since the onset of COVID-19. And we’ve also seen a sharp increase in suicidal thoughts and feelings.”

Impact on retail employees

This presents an obvious challenge for everyone going forward given the fact that many people have been away from their jobs or out of the workforce altogether for a year or more. And, combined with further impacts of the pandemic that have helped accelerate a shift in shopping and purchasing behaviour toward online channels, changing the means by which retailers provide their product and services to the customer, the roles and responsibilities of many have changed in their absence. This factor, along with many others, says Suzanne Sears, President of Luxury Careers Canada and retail staffing expert, are set to precipitate a massive challenge and potential conflict that retailers will need to overcome quickly if they are going to succeed through to a post-pandemic world.

“Perhaps the most detrimental result of the pandemic on the workforce is the working relationships that have been damaged,” she says. “People have lost friends who were terminated during the pandemic. And as we continue to reopen, new hires are taking their places. When people are hired and onboarded outside of the view of current employees, when there’s this kind of disruption, there’s a tendency for them to feel uncertain and to become disconnected. It can lead them to question their value within the organization and whether or not they’re working the right job for the right company. So, they’re coming back into the workforce with disrupted relationships while being required to develop new ones, leading them to feel incredibly insecure. In addition, job descriptions are changing and evolving. So, in many cases, the job that someone was originally hired for either doesn’t exist or has changed so dramatically that those impacted are wondering whether they even want to work in those roles. These factors are posing a huge problem that retailers need to find a solution for in a hurry.”

Communication and compassion

Sears goes on to explain that there are other emotions that employees might feel as a result of their perceived isolation and disconnection. Many will devolve into anger and resentment, she says, emotions triggered by sentiments of abandonment which can manifest in many ways through their behaviour and performance. The potential fallout can be disastrous, presenting impediments to the satisfaction and further development of an employee, stunting the efficiency of the retailer. It’s something that organizations need to address, making it a priority when reopening to employees. In fact, according to Sears, it’s going to be critical that retailers do so, and in a thoughtful and compassionate manner, in order to quell the uncertainty and resentment that could be their ultimate undoing.

“When COVID happened, a lot of people were either laid off or were forced to work from home in an unorthodox environment, away from their peers and the resources that they’ve become used to,” she says. “In many cases, those who have been laid off have received very little communication from their employer during this time. But, as they’re called back to the workplace, employers are going to expect loyalty, hard work and all of the other things that they truly haven’t earned from them. the cost here is an angry employee. And when there’s anger in retail, it expresses itself in many ways. A lot of it is passive aggressive where individuals will refuse to accept the workload or will do their job with intentional sloppiness and lack of care. It can also result in loss prevention issues in which the individual might be ‘getting even’ because they feel that they haven’t been treated right. So, there’s a lot of emotion that needs to be discussed and blotted out. Retailers need to deal with this issue upfront, which is something that they haven’t traditionally been good at doing. They’ve often taken the stance that it’s easy to replace minimum wage and lower paid people. But that’s not the case anymore. Companies need to speak to their employees and perhaps consider hiring some social workers and mental health professionals in order to do some one-on-one investigations and polling to find out how people are really feeling.”

Return to the retail workplace

It’s a notion that’s also subscribed to by CMHA’s Coons, agreeing that open and transparent communication between employers and their returning staff is going to be vitally important in their attempts to properly and effectively reintroduce employees to their physical spaces. And, she goes one step further, suggesting that retailers and other businesses should developed formalized ‘return-to-work’ plans, involving input from employees, in order to deal with some of the issues that are sure to arise upon the return to ‘normal’ in many workplaces.

“The return to workplace following COVID-19 will require a great deal of communication between managers and employees to ensure that everyone can be happy and healthy, while balancing the needs of workers and of the workplace,” asserts Coons. “Having a clear return-to-work plan that includes information on accommodations, should employees need them, is a good first step. Engaging your employees in the creation of this plan may also be helpful in opening lines of communication, increasing transparency in the planning process and allowing employees to feel included and heard. The back to workplace plan and ‘re-onboarding’ process should be based on the physical and mental wellbeing of employees and consider psychological health and safety. Have an open and honest conversation with the employee one-on-one and discuss their concerns. It is understandable that people will feel anxiety with this return to the workplace and ongoing changes. And it can be helpful to validate that to your employees.”

Opportunity to support

Coons also points out that because many employees spend most of their lives at work, employers have an incredible opportunity to support and nurture their positive mental health. Aside from it of course being the right thing to do, she says, organizations who invest in the mental health of their employees by creating a psychologically healthy and safe work environment can expect to see a positive return on their investment, ensuring that they avoid many of the negative ramifications associated with a dissatisfied and disgruntled workforce

“The writing is on the wall,” she says. “Research has shown that there are many positive benefits when employers invest in employee mental health and many risks when they do not. Higher turnover rates, higher long-term health care and disability claims, reputational risk, increased absenteeism and presenteeism are some of the many risks that come from a psychologically unsafe work environment. In contrast, when we work in a healthy, psychologically safe workplace, employment can have positive impacts on employee mental health including higher employee retention and attraction, improved employee engagement, more creativity and innovation and enhanced productivity.”

Levers and resources

To assist retailers in their efforts to create for their employees the psychologically healthy and safe work environment that Coons refers to, there are a variety of tools and resources that they can leverage. The National Standard for Psychological Health and Safety in the Workplace is a resource for organizations that provides a set of voluntary guidelines for organizations to follow. And, the CMHA offers training on the Standard and a variety of customized organisation-specific training and speaking sessions, as well as its nationwide Not Myself Today program – an evidence informed program filled with physical and virtual materials designed to help employers support the positive mental health of their employees, while also providing opportunities for employees to learn skills in order to support their own mental health. Along with available resources offered by associations like CMHA and others, Sears calls attention to some other initiatives that retailers can undertake that will help complement the re-onboarding process that Coons references and ensure a smoother transition back into the physical workspace.

“Companies, particularly those with larger offices and workspaces, should create a ‘buddy’ system so people aren’t returning to work alone,” she recommends. “They should team people up and provide the support that will be required. Many people have been working from home for the past 16 months. It can be overwhelming to return to an office of up to 100 people. And they should also consider arranging small social events on the side, like lunches for six, to help maintain a strong social program within the company. In addition, organizations, whether you’re talking about in-store or office talent, are going to need to offer their employees greater flexibility with respect to hours worked, days worked and time away. The pandemic has created a new social and workplace dynamic. Retailers have got to find the levers that are going to allow them to transition their returning employees in a healthy and positive way.”

Validating value and importance

It’s clear that, as retailers and other businesses across the country continue their staged reopening, the value and importance of the retail workforce has never been greater. Helping to deliver the retail experience, executing on a company’s vision and elevating its reputation among visitors, the retail employee is imperative to everything that a brand does and all that it intends to do. As a result, an effective return to their jobs is essential in order for retailers to reopen with success. But, despite the resources and levers that are utilized to do so, Sears underscores the fact that a healthy and positive culture and the importance of re-onboarding retail employees in the best possible way has to come from the top.

Canadian Company Flow Water Commences Trading on the Toronto Stock Exchange

Toronto-based Flow Beverage Corp. began trading common shares on the Toronto Stock Exchange (TSX) on Wednesday under the ticker symbol “FLOW”. It’s a significant milestone for the company that has been expanding rapidly with its various flavours of water in eco packaging. 

CEO Maurizio Patarnello and Flow founder and Executive Chairman Nicholas Reichenbach virtually rang the TSX opening bell at 9:30 am. ET on Wednesday. 

Reichenbach stated, “Today’s listing of Flow as a public company on the TSX is the result of the last seven years of incredibly hard work and dedication by the Flow team, the enduring support of our loyal shareholders, numerous celebrity influencers and brand ambassadors, our retail partners, and our incredible customers. It’s a very exciting time for Flow as we are now fully capitalized for our next stage of growth. We look forward to welcoming a host of new investors to the Flow family who support our mission to make products that are healthier for our customers and the planet.”

Patarnello said, “Flow’s entrance into the public markets is a major milestone that will help us focus on our growth strategy. We will continue investing in expanding distribution, increasing velocity, and our burgeoning direct-to-consumer model. We aim to increase brand awareness and establish Flow as a leading premium ‘better-for-you beverage’ brand in North America. Flow has tapped directly into the modern consumer’s desire for high quality sustainably packaged water and functional beverage products. The wave of support we have been receiving from our shareholders, retail and distribution partners, and our consumers, is further encouragement that we can take Flow to the next level”.

Flow is one of the fastest-growing premium water brands in North America and has grown its retail distribution rapidly. The company has fans such as musical performer Sean Mendez. 

Flow’s alkaline spring water is offered in original unflavoured and a range of organic flavours in sizes ranging from 330-ml to 1-liter. Using artesian spring sources, Flow products contain naturally occurring electrolytes and essential minerals. Its original and flavoured water products have an alkaline pH. Flow recently introduced a new line of collagen-infused waters with natural flavours.

Nicholas Reichenbach founded Flow in 2014 with a purpose to “bring wellness to the world through the positive power of water.” Flow set out to be a sustainable brand, packaging its products in up to 75% renewable-resource-based Tetra Pak™ cartons utilizing sustainable operations.

Flow beverage products are available online at flowhydration.com, and are sold at over 20,000 stores across Canada and the US. 

For more information, Flow Beverage’s Annual Information Form, MD&As, and further filings are available on SEDAR at: http://www.sedar.com/.

Canadian Retail News From Around The Web For July 15th, 2021

Canadian Retail News From Around The Web

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Central/Eastern Canada News

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Gucci to Expand and Renovate Hotel Vancouver Store into Flagship

Gucci exterior at Fairmont Hotel Vancouver (June 2021)
Gucci exterior at Fairmont Hotel Vancouver (June 2021). Photo: Lee Rivett.

Sources say that Italian luxury brand Gucci will renovate and expand its standalone downtown Vancouver store at the Fairmont Hotel Vancouver by annexing an adjacent space currently occupied by an Omega jewellery store. Gucci will relocate to a temporary location nearby at the northeast corner of Thurlow and Alberni Streets for the construction. 

The current 3,900 square foot Gucci store, which opened in the Hotel Vancouver in 2006, will annex the 2,300 square foot Omega store next to it to create a flagship-sized 6,200 square foot location to house Gucci’s entire collection of ready-to-wear for women and men as well as bags, accessories, footwear, jewellery and other categories. The current Gucci store does not carry the men’s ready-to-wear line which is available nearby at Vancouver’s Holt Renfrew store. 

The expanded Hotel Vancouver store will feature Gucci’s most updated store concept that was recently rolled out with new Gucci stores at West Edmonton Mall in Edmonton and a renovated Bloor Street flagship store in Toronto. Interiors will be plush with velvet, marble and wood. 

OMEGA exterior at Fairmont Hotel Vancouver (June 2021)
OMEGA exterior at Fairmont Hotel Vancouver (June 2021). Gucci will be taking over the space in early 2022 according to sources. Photo: Lee Rivett
OMEGA interior entrance at Fairmont Hotel Vancouver (June 2021)
OMEGA interior entrance at Fairmont Hotel Vancouver (June 2021). Photo: Lee Rivett.

Watch and jewellery brand Omega is relocating its Hotel Vancouver store within the hotel podium to an interior space that will lack a street-front presence. The Omega store is currently located in a prime location with frontage facing the hotel’s West Georgia entrance and street with a dedicated exterior door. Omega opened at its current location before the 2010 Vancouver Olympics as a pop-up and was expanded to become a permanent location because of its success. 

GUCCI interior entrance at Fairmont Hotel Vancouver (June 2021)
GUCCI interior entrance at Fairmont Hotel Vancouver (June 2021). Photo: Lee Rivett.
Older lease plan of the retail main floor of the Fairmont Hotel Vancouver
Future Omega location within Fairmont Hotel Vancouver (July 2021).
Future Omega location within Fairmont Hotel Vancouver (July 2021). Photo: Lee Rivett.

Signage went up for a temporary Gucci location at 710 Thurlow Street in a retail space vacated several months ago by German women’s luxury fashion brand Escada. Mario Negris and Martin Moriarty of Marcus & Millichap negotiated the temporary Gucci lease deal. A building proposal shows that the retail base of the 1090 W. Georgia Street office tower where the temporary Gucci store is located will eventually be expanded to the sidewalk with about 8,000 square feet of retail space and a future tenant is not yet known. 

710 Thurlow Street. Photo: Martin Moriarty via LinkedIn

Gucci also has a presence at Holt Renfrew in Vancouver where it operates concession boutique spaces for women’s ready-to-wear on the upper level, a men’s boutique space downstairs in the men’s store as well as a bag and accessory boutique on the street-level of the Holt Renfrew store. 

Historically, Gucci has had a presence in Vancouver for decades in Holt Renfrew. A small boutique for bags and footwear operated in the former/smaller Holt Renfrew store at CF Pacific Centre in the 1990s and the brand expanded its presence to include ready-to-wear as Vancouver’s locals and tourists began increasingly purchasing luxury goods. Between 1985 and 1987 when Gucci had a lower price-point, the brand had a bag and accessory boutique in the Hudson’s Bay flagship store in downtown Vancouver at 674 Granville Street.  

Gucci – Toronto, ON – Holt Renfrew Yorkdale. Photo: Gucci

Gucci has been investing heavily in the Canadian market for several years. Most recently the brand opened a 5,000 square foot storefront at West Edmonton Mall, marking a milestone for North America’s largest shopping centre which has been adding luxury brand storefronts to the mix. Several months ago Gucci also renovated its 6,500 square foot flagship at 130 Bloor Street West in Toronto to reflect the brand’s most updated store design. Since 2019 Gucci has unveiled concession spaces for women, men, footwear and accessories at Holt Renfrew Ogilvy in Montreal — the accessory shop on the main floor features a unique green checkered floor pattern. In the summer of 2019 Gucci unveiled a stunning 6,000 square foot ‘world of’ concession at Holt Renfrew in Toronto’s Yorkdale Shopping Centre which to many would appear to be a standalone store, given its dedicated mall entrance. 

GUCCI bag/accessory boutique at Holt Renfrew Ogilvy in Montreal. Photo: Maxime Frechette

Gucci also has a presence at Holt Renfrew in Calgary where it has separate concession boutique spaces for women’s and men’s ready-to-wear and bags/accessories. At Square One in Mississauga, Gucci operates a bag/accessory concession with a facade facing onto the mall corridor. In Toronto, Gucci also operates a bag/accessory concession at the Nordstrom store at CF Toronto Eaton Centre. Gucci shoes and belts are also carried at Nordstrom and Saks Fifth Avenue stores in Canada.

In terms of off-price, Gucci also operates a large outlet store at Toronto Premium Outlets which opened in late 2018, coinciding with the closure of Gucci’s outlet store at Montreal Premium Outlets which operated for several years.

Gucci is one of the world’s leading luxury brands with billions of dollars in annual sales. Gucci was founded in 1921 and is now part of the Kering conglomerate of luxury brands. Gucci operates about 500 stores globally. In the United States, Gucci operates a network of standalone stores as well as boutique spaces in large-format/department stores such as Neiman Marcus, Saks Fifth Avenue, Bloomingdale’s, Nordstrom, and Macy’s (Manhattan store only).

Former Hockey Arena in Downtown Belleville to be Converted to Marketplace with Food Hall: Interview

Memorial Market Place (Rendering: Taskforce Engineering)

The historic Belleville, Ontario, Memorial Arena, located in the heart of the city, will be transforming into a marketplace with food establishments and businesses catering to food and drink.

The project is being developed by Taskforce Engineering and being leased by The Behar Group Realty Inc.

The arena, which has existed since 1929, will turn into the Memorial Market Place – “the gastronomic, artistic and cultural hub of the Bay of Quinte region,” according to a marketing brochure on the project. 

Lawrence Mosselson

Lawrence Mosselson, Broker, Vice President, Retail Advisory with The Behar Group Realty Inc., said the ground floor of the building has about 20,000 square feet. 

“The plan is to basically convert it to – I hate using the term food hall or food market because it means so many different things to so many different people – but the project . . . will have a couple of anchors for people wanting to go there and enjoy it. We came up with a restaurants’ plan which shows three larger restaurant spaces and smaller market vendors,” said Mosselson. 

“Our intent is to turn this into a 52-week a year destination for food.”

He said the restaurant plan is what Behar is focused on right now which includes three restaurants/brew pubs ranging from about 1,600 square feet to 5,700 square feet. The plan also includes nine food market vendors which would include potential businesses such as a butcher, cheese shop, bakery, fish place, wine store, etc.

The leasing company also has a plan to show a retailer if it wants to take up the entire space. 

“The one sort of benchmark and the one project that has been helping with some logistic information and stuff is the St. Lawrence Market (in Toronto). That’s sort of the goal. Although the St. Lawrence Market you don’t really have the restaurant component. You only have the one restaurant at the St. Lawrence Market and the rest of them are all vendors,” explained Mosselson.

“I don’t know of any other projects where someone’s taken an arena and turned it into this type of market – at least in Canada. I definitely think this is the first time this is being done in Canada.”

The arena has been closed since December 2010. The legendary Bobby Hull and other National Hockey League players began their careers there. Memorial Arena was also the home ice of the Belleville McFarlands that won the Canadian national championship in 1958 and went on to defeat the Soviet Union in the 1959 International Ice Hockey Federation World Championships. 

The unique Market Place project is buoyed by location. First, Belleville itself, which is central to the region along Highway 401 connecting Toronto to Kingston, Ottawa and Montreal.

Belleville has a CMA population of over 103,000 making it the largest urban centre in the Quinte Region.

Its newly revitalized Downtown District is home to many independent restaurants, cafes, boutiques, theatres, galleries and markets. Belleville plays host to numerous festivals and events that take place throughout the year including the Downtown DocFest, Poutine Feast, Porchfest Belleville and the Kiwanis Walleye World Fishing Derby.

“Downtown Belleville was historically challenged similar to a lot of smaller towns. What happened for a long time vendors and retailers left the historic sort of downtown section of Belleville and moved up to either North Front Street or Bell Boulevard – the two main streets,” said Mosselson.

“Probably about six or seven years ago the City of Belleville decided to heavily invest in the downtown core. They have an extremely strong BIA down there. In fact, the Belleville BIA was the first BIA in the country as far as I know to partner with Shopify to get all of their merchants online and they had done that by the end of April 2020. It’s a very, very strong BIA.

“They have revitalized all of downtown. New roads, new sidewalks. There’s a farmer’s market that operates 52 weeks out of the year that’s actually located almost right outside the doors to the arena. They’ve really been pushing for a lot of investment in Belleville. So this is somewhat of a lynchpin development to the revitalization of the downtown core.”

Mosselson said the hope is for construction to begin at the beginning of 2022 with either the third quarter or fourth quarter of 2022 for tenants to be in the new space and open for business.

Best Buy Canada Pivots Over the Course of the Pandemic: VP Interview

Best Buy at the CF Toronto Eaton Centre - Image by Dustin Fuhs

The past year or so has been a very interesting one for everyone involved in the retail industry from top level executives to the front line staff.

When Chris Sallans, Vice President – Retail & Services Operations and Fulfillment at Best Buy Canada, reflects on what has happened in that time frame he says “it has been one of the most challenging yet exhilarating, exhausting yet invigorating and frustrating yet inspiring times of my career.”

Chris Sallans

Sallans feels that while our return to normal is exciting and should be celebrated, it is equally important to remember and reflect on the hard work and sacrifice made by many to support their families and communities.

And the retailer could not have successfully navigated the stormy waters of the past year without the willingness of its staff to adapt to the changing environment. It’s a story that really resonates with most of the retailers in Canada.

“I am not sure if there will ever be a way for me to convey my absolute gratitude for the thousands of people in the Best Buy family for all that they have done,” he says.

“It has been a privilege to work alongside so many amazing Best Buy employees, both inside and outside our head office, as we tackled each and every unforeseen health restriction, forced closure or operating model adaptation – together.”

Sallans said from the beginning when the extreme uncertainty came in March 2020 the question for Best Buy, as for many retailers, was how to pivot to still be able to serve customers and exist as a business while being as safe of an environment as possible for employees and customers.

“The pivots we’ve had to make to fulfill in the safest mechanism possible we went through a multitude of operating model changes that would change with the governmental restrictions. More often than not we were generally in front of (them). We would be putting restrictions in place to our business before it was mandated. For example, we went to a limited, fully open, but limited capacity model long before any kind of capacity restrictions came in,” says Sallans.

The retailer was an essential service early on in the pandemic as it carries major appliances as well as communications, electronics and technology which increasingly became an important part of people’s lives during this tumultuous period.

Image: Best Buy Canada

From the beginning, the retailer responded to the changing dynamics the pandemic brought on for the retail industry. Everything from plexiglass protection to how people walked through the stores to how customers purchased and picked up products were all initiatives implemented for safety and convenience.

“By municipality we were able to change on a dime the way that a store operated,” says Sallans.

Being nimble became essential.

“Without question. But if you think about before that and going back before that, the importance of the equity you have with your employee base and your workforce. Because to be nimble, you’re going to ask a lot of people to be in a constant change of transition. Everyone gets excited with change when it happens once a year, twice a year. They get exhausted when it happens weekly – when every week you’re completely changing the way your store operates,” he says.

“The importance of keeping engagement high on the priority list to make sure that the emotional bank account we had built up with our people didn’t go into the overdraft because we were making some withdrawals for a little while there. I think the nimbleness without question was essential to survival in the pandemic but that couldn’t be done without being the people first company that we are and love to be – because we were going to need everyone to stand on their heads.”

Image: Best Buy

Sallans says it was important that employees believe in what a company is doing and they have to have an absolute trust that the company is looking out for their interests. 

“We’re coming out of this and everyone’s very excited. Restrictions are getting eased. We’re able to travel again right in time for nice weather. Let’s not forget to appreciate the super human efforts that 10,000 or so employees we have working with us have done over this last year because we’ve come out the other side because of them and I don’t for a second take that for granted. I want to make sure that gratitude is felt because I couldn’t appreciate more what everyone has done.”

Canadian Retail News From Around The Web For July 14th, 2021

Canadian Retail News From Around The Web

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Quartz Co Launches WANT Les Essentiels Pop-Up in Montreal Flagship for Summer Residency

Image: Quartz Co (5445 de Gaspé, Montreal)

Quartz Co. has welcomed WANT Les Essentiels into its Montreal flagship at 5445 de Gaspé for a summer partnership.

This collaboration will allow visitors to discover the timeless, minimalist, and functional products of WANT Les Essentiels, alongside the high-performance outerwear collections of Quartz Co. 

This retail space is the only place to find all the pieces of these two iconic Montreal brands.

Image: Google Maps

Retail Insider reported on the acquisition of WANT Les Essentials in June by The Robert Brothers, who are the owners of Quartz Co.

Jeff Berkowitz of Aurora Realty Consultants represents Quartz Co. in its physical retail expansion in Canada.

Saskatchewan Retail Takes Pandemic Hit and is Seeing Recovery: Interview

Image: DTNYXE Facebook

Considering the impact the COVID-19 pandemic has had on the retail industry across the country, retailers in Saskatchewan feel fairly fortunate to have survived the economic downturn.

Melissa Newton, Client Advisor of The Commercial Group and based in Saskatoon, said the province had the first lockdown which was nationwide at the beginning of the pandemic in the Spring of 2020.

Melissa Newton

“And from there we’ve really been open for business on a retail basis since June or July of last year,” she said. “We had a pretty free summer. Our case load was quite low. People were hesitant. There was not a lot of movement in 2020. But businesses were continuing to stay open.

“We did lose some restaurants right at the first lockdown. Not as many as we thought we were going to. And then 2020 kind of moved along. In terms of activity, it was very low but the stores were doing well. People were supporting local. I know last year sporting goods and bikes were through the roof. People could not find anything to buy. That was really good for those sectors.

“Home improvement, renovations, all of those areas did really, really well. The fashion retailers definitely struggled. But people were still buying little gifts. They were spending more time in their homes. Fashion did take a hit which was unfortunate but that we saw affect the enclosed mall business more than just private businesses here.”

Downtown Saskatoon (Image: DTNYXE Facebook)

Come January, “it’s been busier than heck here,” explained Newton.

Saskatoon retail is now doing well. There has been plenty of activity in the commercial real estate sector. Businesses are making some moves and there is a sense of optimism. Owner/users are taking advantage of interest rates looking to purchase some buildings.

“We have medical groups absorbing some of the old restaurant spaces or just a larger retailer that didn’t make it or already vacant on the market. We have dental groups taking those over. Physio seems to be doing well. Obviously pharmacies and medical users,” explained Newton.

“Ghost kitchens also seem to be a thing or people sharing space maybe running two or three concepts out of one kitchen. That seems to be another trend that’s happening. We’re really, really busy right now. But I think July or August we’re going to see everybody take off for holidays because nobody has taken a holiday for a year.

Saskatoon (Image: DTNYXE Facebook)

“I really expect the rest of 2021 to be just moving along and having a really great year. If you were to walk around downtown you would hardly know that we had a pandemic. Like there’s not a million for lease signs by any means. There’s definitely some inventory don’t get me wrong but it’s not like the sky is falling.”

According to a Q1 Saskatoon retail market report by ICR Commercial Real Estate, despite a challenging year in 2020, there were no major changes in the Saskatoon retail market quarter over quarter as the vacancy rate contracted slightly to 5.18 per cent this quarter.

2020 saw more local retailers following national brands in pivoting to introduce online ordering, curbside pick-up, and speedy delivery as they recognized the importance of providing a safe and easy experience.

“In 2021, convenience has become a new feature consumers look for while shopping and choosing a restaurant. Quick-serve restaurants also sought real estate with convenient drive-through capabilities. Brands that previously did not operate with drive-through lanes began to implement this strategy for the future,” said the report.

“Google mobility data for Saskatoon indicated that consumer movement in retail and recreation recovered faster than the national average and performed three times better than in the last quarter of 2020, but this activity remains six per cent below the baseline of normal activity that occurred before the pandemic.

“Even though government support programs, landlord deferrals, and businesses shortening expenses all helped to flatten the anticipated vacancy spike in the Saskatoon retail market, the market is still expected to experience a rise in vacancy later this year.”

Image: Regina Downtown BID

In its Q1 report for the Regina retail market, ICR said that city too experienced no major changes quarter over quarter despite the challenging year. The vacancy rate declined insignificantly by only 20 basis points to 6.67 per cent in the first quarter of 2021.

Like Saskatoon, convenience has become a key for consumers in the market.

“Google mobility data for Regina indicated that consumer movement in retail and recreation recovered faster than the national average and performed better than it did in the previous quarter, but this activity remained 20 per cent below the normal baseline level of activity that occurred before the pandemic,” said ICR.

And like Saskatoon, Regina retailers benefited from government support programs, landlord deferrals, and businesses cutting expenses. That all helped to keep the vacancy rate down but ICR said the market is still expected to experience a rise in vacancy later this year.

“Overall, consumers continued to spend money, but convenience will be a critical factor in 2021. Retailers, both national and local, will need to continue to look into strategies to improve their operations in order to stay afloat,” it said.

Shopping Centres in Canada to See Changes Amid Pandemic and Shifting Retail Industry: Experts

CF Toronto Eaton Centre - Photo by Dustin Fuhs

Shopping centres across Canada were reinventing themselves prior to the advent of the COVID-19 pandemic more than a year ago.

But the health crisis, which turned into an economic crisis as well, has accelerated the pace of change for the malls of the future.

Corrado Russo, Senior Managing Director and Head of Public Real Estate Investments at Hazelview Investments, said malls were already having a pretty tough time pre-COVID.

Corrado Russo

“They were losing market share in terms of sales to online shopping and e-commerce. So this was a trend that was already going on and they were sort of suffering from death of a thousand cuts and what COVID did, and the pandemic, is accelerated all of that. The estimate is they probably lost about five to seven years of market share in about 12 months because of the pandemic because everybody was forced to buy online and many of those that were not typical online shoppers became online shoppers and because of the convenience may not go back,” he said.

“We do think the mall is going to be in a tough spot. But it doesn’t mean they all have to disappear. Those that do a good job reinventing themselves will survive and can thrive especially if they see less competition.”

Over the last 10 years, Russo said malls have been changing from material goods to experiential shopping by creating locations such as movie theatres, bars, restaurants, gyms – all social gathering places.

“The Glass House” at The Amazing Brentwood. Photo: Lee Rivett

That will come back and help them in the short term but it’s not going to be the answer for them going forward.

“Much of the space in these malls is taken up by the big department stores. These are having tougher, tougher times and that retail format is becoming obsolete. So they’re going to have some challenges in terms of how to fill that space and have it drive traffic to the malls,” said Russo.

“So I think the next phase in addition to everything they’ve done on the experiential side is to attract a new set of tenants that haven’t historically gone to malls. So you’ve got grocery stores which historically have been stand alones. If you look at what Europe’s done and why Europe’s done a better job surviving the pandemic is because they’re anchored by grocery stores rather than department stores.

“The other big one is attracting online retailers, the digital retailers, to the physical stores. I think the more and more we all learn about retail and the recipe for success for a retailer it’s to really have both online and a physical presence and that combination can be powerful and the most successful retailers get that. The malls, and the management teams, that can attract those digital retailers to the mall can help drive that space, help drive a certain vibe to their mall and continue to be successful that way.

THE COURTYARD at Willowbrook Shopping Centre Rendering

“The last one I would say is big box. Some of the bigger box whether it’s a Home Depot or some of these bigger stores, we see clustered outdoors, again bringing them to the mall. It’s going to take all of that to get them to survive and I think they’re also going to see a lot of retail go away whether the malls completely disappear or whether you see half of the malls disappear you see other uses start to come in because at the end of the day they typically are in good locations that are easy to get to.”

That means you can have alternative uses for the land such as residential buildings or office buildings – even industrial real estate. Perhaps even fulfillment centres.

More and more property owners across Canada are taking excess space in parking lots and building condos and apartments. Russo said he believes this will become the number one use of alternative space at shopping centres.

“The nice thing about malls is they have a lot of excess land. They typically have a lot of parking and it does a couple of things for a mall. If you take away 40 per cent of the retail space of a mall and you turn it into residential, you’ve done something with the space and turned it into something of value but you’ve also brought a customer to the mall. Now you’ve got an audience you can target in terms of convenience oriented retail. Groceries being part of it. It makes the remainder of the mall much more productive. You kind of kill two birds with one stone,” explained Russo.

“It’s probably the number one thing investors are looking at when they are buying a mall today. What is the potential for converting to residential? I think that’s one of the recipes that can really help for those malls that need help, that are struggling, where you don’t need all the space you currently have.”

Russo said educational uses for mall space also has potential.

Rendering of Oakridge Centre in Vancouver in 2024. Image via QuadReal

Bruce Winder, author of RETAIL Before, During & After COVID-19 and President, Bruce Winder Retail, said the shopping centre concept was well into its transformation before the pandemic hit and will continue to shapeshift as COVID-19 tapers off as a going concern.

Bruce Winder

“Over the last 20 years we have seen shopping centres become polarized into three groups: the A malls which cater to luxury shoppers, the B malls that are in transition to more functional marketplaces and the C malls which are being flattened in favour of residential communities. This polarization mirrors society overall as retail splits into high-end and low-end offerings. Big brands and small to medium sized enterprises,” said Winder.

“Luxury A malls are magnificent cash generators for all involved. With strong margins and a huge average ring, these destination shopping malls offer value-added experiences to cater to well-heeled customers. Service is everything in these malls as customers are pampered while they shop. Look for these malls to add even more technology-driven experiences where global brands integrate e-commerce and social media with physical brick and mortar showcases to create euphoric consumption.

“B malls will transition to become a mix of grocery, drug stores, dollar stores, online pick up spots, gyms, professional services (doctors, dentists) and restaurants that fulfill the needs of more modest income shoppers. We will also see the emergence of local digitally native brands as they build on their online success with a physical footprint. Technology will enable this modern marketplace with e-commerce, social media and bricks and mortar working together in harmony.

“For C malls, the math is straightforward. Landlords and developers can make a lot more money converting an underperforming plaza into condominiums or townhomes with convenience retail on the bottom. The economics are too attractive, especially in urban and suburban locations where many of these malls peaked in the 20th century.”

He said all three classes of shopping centres will convert to touchless retail where feasible as legacy pandemic fears shape design considerations for years to come.