The recently-announced, new federal business loan will provide a lifeline for many retailers and small business owners across Canada who are on the brink of collapse as a result of the punishing economic blow the COVID-19 pandemic has dealt them for nearly a year.
The Highly Affected Sectors Credit Availability Program (HASCAP), with the Business Development Bank of Canada, will work with Canadian financial institutions to offer government-guaranteed, low-interest loans of up to $1 million. Hard-hit businesses, like a chain of hotels or restaurants with multiple locations under one related entity, could be eligible for up to $6.25 million.
“The pandemic has affected employers across sectors and had a tremendous impact on the jobs and lives of Canadians and Canadian families. Our COVID-19 support programs have worked to protect millions of jobs, but we know that the second wave of this virus continues to weigh on many workers and businesses,” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance, in a statement.
Bruce Winder
“HASCAP gives those in highly affected sectors — like tourism, hospitality, arts and culture — new support so they can weather this storm and be ready for a robust recovery that will create jobs and strengthen the middle class.”
Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail, said the new program will help some retailers but one can argue that distressed retailers may have already tapped into initial loan programs and this is too late to save them.
“Also, many businesses don’t have the margins and will not have the margins to pay back this new loan so it does little to help them long term. It may keep them alive as ‘zombie’ businesses but will just postpone the inevitable,” he said.
“For those who can use (government support) and make it work it is critical as we are in for some tough times for several more months and this may be the lifeline they need to get them to safer ground during holiday 2021.”
Alla Drigola
Asked if there is anything else government needs to do for businesses, Winder said: “Some will argue for business grants versus loans but then society must ask if it is government’s job to do so. Governments bailed out business after the Great Recession and received significant backlash from voters.”
Alla Drigola, Director of Parliamentary Affairs and SME Policy at the Canadian Chamber of Commerce, said overall the program is good for businesses particularly in the hard hit sectors like tourism, travel, accommodation and food services.
Many businesses have had trouble accessing the government’s original loan program due to a number of factors and this new HASCAP program really allows these businesses to participate and allows them to bridge to the end of the pandemic, she said.
Drigola said a number of government support programs in the past year have been “critical in helping businesses of all sizes, but particularly small businesses, survive through the pandemic”.
“And this loan program is going to be another tool in that arsenal of the options available. But at the same time businesses can’t operate on debt forever and a program like the HASCAP program can only be made stronger by having a forgivable portion or even expanding that top $6.25 million ceiling to allow some of those medium to larger size businesses to take advantage,” said Drigola.
Jasmin Guenette
“But overall I think the supports that have been provided have been critical in ensuring that businesses can survive. But at the end of the day these are just band aid solutions and the best thing the government could do is to manage COVID in a coherent and consistent way across Canada to allow businesses to be able to reopen and get back to business and serve customers of course in a safe manner.”
“We are 11 months now into the pandemic and so it’s important for businesses to have access to funds to make sure that they can remain open,” said Guenette. “We’re happy with the program. Many of the principles are solid so it will be helpful for many firms, especially for those that are mostly affected by the pandemic.
“But we do have some concerns. One is that most of small businesses cannot just take on more debt related to the pandemic at this time. So we’re calling on the government to make a portion of the loan forgivable as part of this program. A little bit like they are doing with the CEBA (Canada Emergency Business Account) program. This would be an important change to be made to the program to make sure that a portion of the loan is forgivable.
Olivier Bourbeau
“And also the program is leaving out new businesses that started after March 2020. So it’s another federal program after the wage subsidy, after the rent subsidy program, after the CEBA loan program, now this new program also leaves out new business from applying to the program. We’re asking the federal government to either change some of the eligibility criteria for that specific program or put in place a new program for new businesses that were launched after March 2020 who don’t have access to COVID relief federal programs.”
Olivier Bourbeau, VP, Federal and Quebec, for Restaurants Canada, said the organization appreciates the federal government stepping up by bringing a program like this forward.
“This will be helpful. We would like for the program to be forgivable, to be a forgivable loan. That would help more . . . The current programs are helpful indeed. The thing is that they need to be extended. They need to continue after June. We need continuous support from the federal government until the end of the crisis, not until summer. The majority of our restaurants will take at least one year just to come back to profitability,” said Bourbeau.
“It is something that we bring to our discussions with the government on a daily basis.”
To be eligible for HASCAP, the federal government said businesses need to show a year-over-year revenue decline of at least 50 per cent in three months, within the eight months prior to their application. They must also be able to show their financial institutions that they have previously applied for either the Canada Emergency Wage Subsidy or the Canada Emergency Rent Subsidy. Eligible businesses can start applying as early as February 1 at principal financial institutions and more widely by February 15.
Dan Kelly, President of the CFIB, said the national organization’s latest data finds that one in six businesses is currently considering permanent closure after months of restrictions and low revenues. Canada could lose as many as a quarter of its small businesses by the time the pandemic ends, he added.
Dan Kelly
“The government must work to open the application process at all financial institutions as soon as possible and get the loans flowing out quickly after that to ensure businesses can cover any urgent and outstanding costs,” said Kelly.
“The program also leaves out new businesses that started in 2020. CFIB has pointed out that none of the federal support measures are currently available to new firms and has asked the government to create pathways for them to access HASCAP and all other government support programs.
“CFIB thanks the government for its continued willingness to listen and respond to the needs of small businesses. With the right changes, the federal COVID-19 support programs can help prevent thousands of business closures in the coming months, ensuring a faster economic recovery once the crisis is over.”
Rexall's offerings displayed on the Uber Eats app. Photo: Uber Eats
Canadian pharmacy chain Rexall has teamed up with Uber Eats to give customers access to more than 800 healthcare products, for in-store pick-up or delivery, available at 200 locations across Canada.
Through the Uber Eats mobile or desktop app, customers can place orders for delivery or in-store pick up in locations in British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario.
“As Canadians across the country do their best to stay home, Rexall is excited to increase convenience and expand our service offering to customers,” said Nicolas Caprio, President of Rexall. “Uber is a perfect partner for us, as we continue with our goal of bringing much-needed health and personal care products to our customers safely and quickly.
Nicolas Caprio
“Since the pandemic, what we’ve been trying to do is really understand the consumer and the consumer behaviour shift that has occurred during this pandemic. One of the realities is for us to be able to cater to that ever-evolving consumer need. And especially right now if you think of the state of home orders here in Ontario and even across the country, the consumer is thinking how do I conveniently shop and do it in a safe way. And so this is another one of those partners and we came together thinking of that consumer need and we feel that the Uber Eats is a great partner that responds exactly to that need.”
Items as part of the program range from health, personal care, household, cleaning, beauty, cosmetics, baby supplies, and more.
“If you need non-prescription or personal care items delivered to your door, Uber Eats and Rexall have you covered,” said Lola Kassim, General Manager of Uber Eats Canada. “We’re excited to launch this new partnership, providing Canadians in 63 cities with a convenient ordering and delivery option with Rexall.”
Lola Kassim
Caprio said the products are picked in the store by employees from the consumer order.
Rexall has just over 400 locations in Canada. The locations chosen for this new program are the ones that fit in best to what the pharmacy chain can logistically handle.
The products that are part of the program are from what the company has seen as the greatest consumer requests. It does not include prescription medication. Those services are offered through the Rexall Direct program.
Gary Newbury, retail supply chain and last mile interim executive, said Canadian retailers continue to find creative ways to connect with their consumers during the pandemic.
“This is an exciting new partnership between Rexall and Uber Eats, using the latter’s already established local network for delivering meals to Canadians at home. Unlike Instacart, the “shopping” will be performed by a Rexall member of staff, knowledgeable in the product, keen to serve the consumer well and help the banner preserve sales during this period. They will also be able to call the customer for any queries and help cement the relationship this way, especially in the area of personal care consumption and “shelf available” alternatives.
Gary Newbury
“Rexall is embracing “lockdown resilience” by using their own people to pick and pack for both “click and collect” as well as home delivery which makes a lot of sense. As volumes increase, they will learn how to manage both these online services, improve space utilization and integrate their shelf filling and order picking into the role of the store associates. The lessons learnt will be invaluable if they are shared across their chain to quickly improve efficiencies. This is the big benefit of using your own people, rather than outsourcing the personal shopping to a third party.”
Newbury said that increasingly other retailers will be looking to bring the “shopping” into the store associate’s responsibilities.
“Whilst each retailer continues on their online/digital fulfillment journey, it is one that may take several twists and turns as they attempt to scale. They may find, quickly, capacity will be a big deciding factor in whether to move from in-store picking to a micro fulfilment (MFC) solution, and whether this will be store based, or a dark store,” he said.
The latest numbers from Statistics Canada for November 2020 show that total retail sales have recently hit the highest growth rates in 3 years. Nevertheless, due to declines earlier in the year, 2020 overall retail sales will likely end up at about 1% down. Furthermore, things don’t look good going into December and January due to reinstated COVID lockdowns and even curfews. The collapse of retail sales in Q2 2020 shows what could happen.
There is a school of thought that all the money consumers are not spending on restaurants, theatres, travel, and other entertainment is getting saved and will eventually work its way back to the retail market, perhaps in late 2021 after the COVID pandemic substantially dissipates. There is no precedent for this however, so it still remains to be seen. Once it’s safe to go shopping again, there will likely be an uptick in retail sales, but no one knows how much that will be nor how long it might last.
Total Canadian retail sales were up 7.0% year-over-year for the 3 months ending November 2020, a 3 year high. Due to the deep declines earlier in the year however, year-to-date retail sales are still down 1.9%, and are unlikely to finish in the black with only one month left to go. This will make 2020 the worst year for retail sales growth since 2009 and the “Great Recession”.
Food & Drug
For the 3 months ending November 2020, Food & Drug retail sales were up a whopping 10.0% year-over-year, which could be an all time high. Year-to-date sales are up 8.2%, and the sector is poised for record breaking growth in 2020.
Supermarkets and other grocery stores are the main driver of sales growth in Food & Drug, with retail sales up 11.0% year-to-date. Convenience stores, specialty food stores, and beer, wine & liquor stores are also having a strong year.
After only modest growth in the first half of the year, retail sales at health & personal care stores are now also showing strong gains. Their sales were up 10.9% for the 3 months ending November.
Store Merchandise
Recent sales increases in the Store Merchandise sector are even more impressive. Their sales were up 11.6% for the 3 months ending November. Due to significant declines in Q2 however, year-to-date sales are up only a modest 1.0%.
The 3 month sales trend (orange line in the chart) is now at record high levels, and the underlying 12 month trend (green line) is following suit. But it may not last. New COVID lockdowns and shutdowns started to come into effect in December, which will likely result in slower sales and even declines as occurred in Q2. Retailers however should now have a better handle on and more tools to deal with the situation.
Many retailer types have been experiencing strong sales growth in recent months, often by double digits. One glaring exception however is clothing and accessories stores, whose sales were down 12.5% for the 3 months ending November. These retailers are more likely to be small chains and independents with fewer resources and located in shopping malls they depend on for foot traffic. Live by the mall, die by the mall.
Automotive & Related
Retail sales in the Automotive & Related sector have improved from the collapse in Q2 2020, although the 3 month trend is now hovering at around the 0% growth level. The underlying 12 month trend (green line in the chart) has gone flat at about the minus 11% level. In the short term at least, there appears to be little relief on the horizon.
Automobile dealers’ sales however have partially recovered from the disastrous results earlier in the year. Their sales were up 5.4% for the 3 months ending November, although still down 10.9% year-to-date for 2020.
Gasoline stations continue to be the main drag on overall Canadian retail sales. Their sales were down 16.0% for the 3 months ending November. While overall retail sales were up 7.0% over this period, the result would be plus 9.7% if gasoline stations are excluded.
By The Numbers
Note that the data and analysis in this report are always based on not seasonally adjusted (or unadjusted) retail sales statistics.
The chart above shows that the pace of Canadian e-commerce retail sales doubled year-over-year in Q2 2020 with the onset of the COVID pandemic. That has since cooled off somewhat, but to “only” a 74.5% increase for the 3 months ending November. By any measure, this is still phenomenal growth.
Overall, e-commerce represented about 5.7% of Canadian retail sales for the 12 months ending November 2020, including both pure play as well as bricks & clicks stores. Note that Canadian consumers may also buy online from foreign websites which is not captured in these numbers.
Location based retail is the same as that in the preceding “By The Numbers” table. It’s what’s normally reported as Canadian retail sales. Except that it isn’t. Location based retail excludes another section called Non-Store Retailers (NAICS code 454), which includes electronic shopping and mail-order houses, which in turn is where (mostly) pure play e-commerce businesses are. For the 12 months ending November 2020, electronic shopping and mail-order houses had an estimated $21.8 billion in e-commerce sales.
But that’s not the only source of e-commerce, as (mostly) bricks & mortar location-based retailers also sell online. For the 12 months ending November, this group had an estimated $13.7 billion in e-commerce sales. With electronic shopping and mail-order houses, there’s a grand total of $35.6 billion in e-commerce sales by Canadian operators. Note that this does not include foreign e-commerce purchases made by Canadian consumers, but it does include e-commerce purchases made by foreigners at Canadian operations.
For electronic shopping and mail-order houses, an estimated 93.6% of their sales are allocated to e-commerce. For (mostly) bricks & mortar retailers, it can be estimated that 2.3% of their total sales are attributable to e-commerce.
In the final section of the above table, (mostly) pure play operators (namely, under electronic shopping and mail-order houses) generated an estimated 61.4% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce was 38.6%.
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Exterior of FreshCo grocery store. Photo: Supermarket News
Empire Company Limited continues to expand its FreshCo discount banner in Western Canada as the company takes advantage of consumers’ current appetite for quality at a discount price.
Empire has now confirmed 37 of approximately 65 locations in Western Canada. In December 2017, it announced plans to convert approximately 25 percent of its Safeway and Sobeys locations to FreshCo over a five-year period and it is on track with the Project Horizon commitment to open 10 to 15 FreshCo stores in fiscal 2021.
Mike Venton
Overall, the company currently has a total of 116 FreshCo stores — 22 in Western Canada and 94 in Ontario.
“Empire’s discount network has grown 23 percent since we opened our first store in the West only two years ago,” said Mike Venton, General Manager, Discount, with FreshCo and Chalo FreshCo, which are discount banners under Sobeys and the Empire umbrella.
“We are committed to delivering market share growth through Project Horizon; Alberta is ripe with opportunity for Empire to compete with a strong discount offering. We are now more than half way through our FreshCo expansion in Western Canada.”
On average, the FreshCo stores are about 35,000 square feet with a limited assortment, added Venton.
“We like to speak about our fresh foods. We try to give you fresh foods at a comparable quality to what you would see at a full serve store at discount prices,” he said. “That’s one of the big things we stand behind. It’s also one of our guarantees. One of the guarantees is if you find any fresh item in a store that is not to your satisfaction we not only would replace the product but we would also replace your money. We market it as a fresh guarantee just to give you confidence hopefully that when you shop in our stores you should feel comfortable about the quality we’re selling.
“The other thing too around us being a discounter is we give a raincheck guarantee that if something in our flyer is not there, we made a mistake, or it sold faster than we thought, we give rain checks and we add 10 percent of the value just for an inconvenience factor and we have a price match guarantee. Anything in the flyer of a competitor if you bring that to us either on your phone or a paper, we’ll match that and we’ll beat it by a penny.”
Chalo FreshCo was inspired and created to cater to the South Asian market.
“The business knew that that particular demographic was the fastest growing in Canada. There was a lot of research done actually even before my time about developing an add on or a new brand for our discount business. There’s many overlaps, meaning if you walked into a new Chalo store or a Chalo store you would find about 5,000 unique items that would cater to the demographic but you would also have a standard FreshCo embedded in the middle of that store,” said Venton.
“So everything you would get at a FreshCo you would get at a Chalo.”
The 37 FreshCo locations in Western Canada will include 1.4 million gross square feet. Click here for a full list of the 37 FreshCo store locations confirmed to date. The company said store closure and conversion costs are estimated to be approximately $11.7 million before tax and will be charged to earnings in the third quarter of fiscal 2021.
Earlier this week, Empire announced seven new locations for the FreshCo discount banner. Four stores in Manitoba and two in Alberta will open this Spring. One Saskatchewan store will open in the Summer. One Alberta store will open in the Winter of 2021/2022. There will be six Alberta store conversions and one Northern Ontario conversion.
Exterior of Chalo FreshCo. Photo: Chalo FreshCo
Since April 2019, the company has opened 16 FreshCo stores in B.C., two in Manitoba, and four in Saskatchewan. By the end of fiscal 2022, the company plans to have these 37 FreshCo stores open in Western Canada.
Across Western Canada, the FreshCo stores are primarily conversions of Safeway stores but some Sobeys are also being converted and some are brand new builds.
The six Alberta FreshCo store conversions announced this week are: Brentwood in Calgary; Millbourne Mall in Edmonton; Saddle Ridge in Calgary; Coliseum in Edmonton; Palisades Square in Edmonton; and Gateway Village Mall in St. Albert. Closures of the respective Safeway stores will start in the first quarter of fiscal 2022, and open as FreshCo stores starting at the end of the second quarter of fiscal 2022.
In Northern Ontario, the Safeway store in Thunder Bay will close in the first quarter of fiscal 2022 and re-open as a FreshCo store in the second quarter of fiscal 2022.
There are currently seven Chalo FreshCo stores with three in Western Canada and four in Ontario. A new store will be opening in Edmonton and one in Brampton, Ontario within the next few months.
“We think the runway for this banner is huge because we look at the growth of that customer base in Canada as the most aggressive growth of any customer base there is. We like to say we’ve almost perfected it — because I’d never say we perfected anything in Ontario — but a very powerful brand and we introduced it to the West and we’ve got our work cut out for us because we know who we compete against and we think we’ve got a really good opportunity for this,” added Venton.
In Western Canada as a company, Empire really had no presence of discount before. It was a full serve retailer and it wasn’t being represented in discount which is the fastest growing segment of retail. So it made perfect strategic sense, said Venton.
“We look at the market and we strategically look at where it makes sense for many reasons. What’s the demographic? The discount business is very well in multicultural markets, we look at lower averaging costs, we look at where we’re saturated with stores that are full serve, because we bought the Safeway banner a number of years ago but there’s many Sobeys that are located in very close proximity to other stores. And then we have stores that were just not performing in the full serve. A number of factors we analyze pretty closely and then we make decisions,” he said.
“Everybody’s looking for value. That hasn’t gone away. The market is getting more and more competitive. Discounters are getting better. Options for shopping discount in terms of customer satisfaction and in terms of what they find is significantly better than it was previously. I think of us in that regard and I think of competitors. We’ve just improved. One area for sure is fresh food . . . I like to think too that we appeal to smart shoppers that know value and come to us. They might be driving a BMW, who knows, but we also appeal to the customer that needs to make ends meet. And this is where they come as well. So we have quite a dichotomy of customers if you look at our base.”
Empire said it will work with the unions representing affected Safeway employees in Alberta and Northern Ontario to ensure all terms of the collective agreements are met.
“We will also work with the respective unions to provide options to impacted employees, including the opportunity to work at Safeway stores within the network or in the new FreshCo locations,” it said.
U.S.-based outdoor specialty retailer L.L.Bean is continuing with its Canadian store expansion with a location opening this year in suburban Halifax. North American Development Group (NADG) says that it is welcoming L.L.Bean to Dartmouth Crossing, with the new 15,000-square-foot store scheduled to open in mid-2021.
L.L.Bean will be Dartmouth Crossing’s newest retail tenant, joining a soon-to-open Playdium at the 518-acre commercial centre, featuring over 1.8 million square feet of retail shopping space, which includes the only IKEA east of Montreal. Plans for additional entertainment, lodging, retail, and commercial tenancies are in the works.
L.L. Bean at Dartmouth Crossing. Image: North American Development Group
L.L. Bean saw three new stores open in Canada in 2020, bringing the current total store count to four, excluding the soon-to-be Halifax location. L.L.Bean’s first Canadian store opened in Oakville Ontario in August of 2019. That was followed by openings in Ottawa, Barrie, Vaughan Mills and at CF Shops at Don Mills in Toronto last year. Oberfeld Snowcap is leading the expansion which will see as many as 20 stores open in Canada over the course of a decade in partnership with Canadian distributor Jaytex Group.
The retailer launched its Canadian e-commerce site in the fall of 2018, followed by the introduction of a Canada-specific catalogue. Despite the pandemic, L.L.Bean sales in Canada have grown. E-commerce sales are up significantly compared to 2019 and the brand has seen a two-fold increase in first-time Canadian shoppers.
Exterior of Longo’s store. Photo: Longo’s
Longo’s Ranks as the #1 Grocery Retailer in Ontario
Leger surveyed more than 13,000 Ontarians across the province to find out how they rate their in-store customer experience. Each retailer was scored on 16 dimensions, including product offerings, pricing, service quality, store experience, personalization, and other factors including curb appeal and proximity.
The study revealed that customers consistently provided high rankings for Longo’s ambiance, product quality, check-out efficiency, curb appeal, customer importance, and staff courtesy. Customers surveyed reported feeling Longo’s stores are inviting and comfortable, and that they always trust they will find good quality products.
Overall, 145 retailers belonging to 20 sectors were analyzed in the WOW Study. Each grocery retailer was assessed by an average of 400 respondents who visited one of this retailer’s stores in the past month. Data collection took place from October 18 to November 23, 2020.
Connect4Commerce
Alberta Entrepreneur Launches Initiative to Help Small Businesses During COVID-19
Alberta entrepreneur and business development expert Bruce Tannas is launching a new online marketplace to help small business owners and entrepreneurs connect, grow, sell, and learn during a difficult time — as up to 42,000 Albertan small businesses risk closure due to COVID-19, according to the Canadian Federation of Independent Business.
Connect4Commerce is an online platform for buying and selling everything from equipment to entire businesses. It’s intended to be a convenient place for entrepreneurs and business owners to find reliable business service providers such as accountants and lawyers, and features offices and buildings for sale or lease. The site is also a hub of helpful information and expert advice related to buying, selling and growing a small business.
“While there are other buy-and-sell websites, Connect4Commerce is the only one-stop-shop designed specifically for business-to-business interactions, making it more targeted and generating a highly engaged community,” said Bruce Tannas, CEO of Luna Media Inc. and founder of Connect4Commerce. “It is more important now than ever for small business owners to have serious buyers and potential clients at their fingertips.”
Kawaii Alley Opens at West Edmonton Mall
West Edmonton Mall has a new retailer: Kawaii Alley. The Japanese character shop is a family-owned business specializing in rare and popular items from Japanese cartoons, Animes, K-Pop, and more. The plushies, stationary, and accessories are designed for children, teenagers, and adults alike. This is Kawaii Alley’s first Canadian store and is located on Level Two, Phase Three of West Edmonton Mall, near the T&T Supermarket.
It’s an example of an independent retailer securing space in a leading mall, indicating some confidence in physical retail at a challenging time. Alberta hasn’t had the same lockdowns as some parts of Canada and as a result, some retailers are seeing strong in-store sales.
Recently, Retail Insider conducted a thorough photo tour of all phases of West Edmonton Mall. Splitting the tour into two parts due to the size of the mall, Phase One and Two can be enjoyed here and Phase Three and Four here.
Farm Boy logo
Ontario-Based, Empire-Owned Grocer ‘Farm Boy’ Set to Open at Front & Bathurst This Week
Downtown Toronto is days away from the opening of yet another Farm Boy grocery store location. Due to open to the public on Thursday January 28, the Front and Bathurst Farm Boy (29 Bathurst Street) will span 33,400 square feet.
Shoppers will find the usual fresh farm produce, large organic selection, and a range of hormone-free meat and sustainable seafood that the brand is well known for.
The pizza, grill and sushi stations will be up and running, and self-serve areas like the hot bar and salad bar will now be handled by staff due to COVID-19 health measures.
Click for interactive Google Map of Front and Bathurst neighbourhood
It’s been three years since Farm Boy opened its first Toronto location in Etobicoke. This Farm Boy is now the third store in downtown Toronto, following last year’s openings at Yonge and Soudan and Bay and College. It marks the first of four stores scheduled to open in Toronto this year. Upcoming locations in 2021 include Harbourfront, Dundas West and Aukland, and Dupont and Christie.
Currently the grocer has 35 stores across Ontario, with complete expansion plans to add 11 more stores in the near future, focusing on both urban and suburban locations.
Flow Alkaline Spring Water.
Canadian Company Flow Water Set for IPO Debut
Flow Alkaline Spring Water is announcing that the company will be going public with an upcoming IPO. Flow Water Inc. and RG One Corp. say that they expect that the transaction will be completed in the first half of 2021 — Flow is looking to raise a minimum of $65 million, of which $30 million has been committed from existing shareholders as part of a non-brokered financing. The remainder of the financing will be raised through a brokered private placement of subscription receipts of approximately $35 million.
Nicholas Reichenbach, Founder and CEO of Flow, stated “We are very pleased by the wave of enthusiasm we saw for our non-brokered private placement, which we ultimately upsized to $30 million. In the wake of this incredible financing round, we are ready to pursue our listing on the Toronto Stock Exchange, which we view as the first step in our life as a public company. We believe that this committed capital along with our entrance into the public markets will accelerate our growth through expansion of our omni-channel retail distribution and continued product innovation, and further strengthen our brand and competitive positioning as we aggressively target the large and rapidly-growing premium enhanced water and ‘better-for-you’ beverage markets, with our core premium alkaline mineral spring water, global award winning organic flavoured waters, and collagen & organic certified vitamin spring water infusions. ”
Flow is launching a 2021 spring and summer campaign featuring a host of celebrity investors including Shawn Mendes, NBA superstar Russell Westbrook, and Taboo from the Black Eyed Peas. Their goal is to drive mass awareness of Flow’s mission and vision and inspire the Flow movement across social media and marketing platforms, and reach consumers in all channels.
Closed business due to COVID-19 lockdowns. Photo: Dustin Fuhs
There is a growing frustration by the small business community in the country on what entrepreneurs are calling an unfair advantage for big box retailers like Costco and Walmart operating during restrictions that have been created to deal with the COVID-19 outbreak.
The Canadian Federation of Independent Business has been a very vocal proponent of governments levelling the playing field for all businesses during the implementation of a lockdown and public health measures.
Now, the Toronto Association of Business Improvement Areas, the voice of the city’s 84 BIAs, representing over 70,000 businesses, and Toronto City Councillor, Brad Bradford, representing Beaches-East York (Ward 19), have sent a letter to Ontario Premier Doug Ford outlining their concerns over this issue.
“As a community we support the increased efforts to tackle the virus, however, we are also concerned about their effectiveness to contain the spread and inconsistent impacts for small, locally-owned businesses,” said the letter.
“Under the latest emergency orders essential retailers — particularly big box stores — are able to sell non-essential items in-store, and after-hours. This puts small businesses at a disadvantage and is a public health concern as it may encourage non-essential travel.
John Kiru
“We are asking you to take urgent action by going one step further in the orders and mandating big box stores and other retailers selling essential goods to close off sections of their stores where non-essential items are displayed. Manitoba has implemented this strategy and has seen cases going down since the order went into effect. We recognize that big box stores need to be kept open to provide essentials goods for folks, especially given the varied geography and access to online shopping across Ontario. But there is also an imperative to be fair with main street businesses who have made incredible sacrifices throughout the pandemic.”
John Kiru, Executive Director of the Toronto Association of Business Improvement Areas, said the reality is that small businesses are still trying to figure out what the evidence is to shut them down and keep the Costcos and the Walmarts of the world open.
“They’ve got hundreds of people going through there. There’s no real controls. (A recent) blitz on these places shows that they’re not very responsible in meeting their obligations under the lockdown requirements. We’ve been closed for two months. Small business is up against it. We’re losing them left, right, and centre out there and nobody has ever been able to show us that shopping is an issue that has caused some of these (COVID) numbers,” said Kiru.
“The fact that we have to be closed then we suggest that what’s good for the goose is good for the gander. And these big shops that are out there, we have no problem with the essential stuff absolutely. But when you can go in there to Walmart and walk out with a 90-inch TV I don’t know how essential that is.
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Closed business due to COVID-19 lockdowns. Photo: Dustin Fuhs
A quiet Queen Street West in Toronto during lockdown. Photo: Dustin Fuhs
Shuttered Tim Hortons in Toronto. Photo: Dustin Fuhs
Shuttered Prairie Girl Bakery in Toronto. Photo: Dustin Fuhs
“So if you’re going to be serious about the lockdown, be serious about it. Shut down all non-essentials. These power centres, these power big boxes, are more than capable of pivoting and making an adjustment within their layout. They do seasonal makeovers in those stores overnight. They’d be able to push aside a few aisles, put up some fencing or rails to keep people out of that area. If we can’t open our doors, then we would suggest that since we’ve been closed others should experience it.”
Kiru said the lockdown in Ontario could be easily modified while maintaining all the safety protocols by allowing small businesses, for example, to open under appointment based shopping, with limited capacity and contact tracing.
“We believe we can be responsible and manage our stores in such a way in terms of cleaning, in terms of the amount of people that could come in. We were closed right through Christmas which traditionally is the time of year, and before Christmas as well, when you make hay while the weather is good. That’s when we have a good year and you make up that money to carry you through the rest of the year,” he said.
“Well this year we didn’t have that and here we are. (Recently) it was Blue Monday. But for small business, January and February and part of March are usually blue months because people are getting their bills from Christmas. Business on main street is traditionally tough through January and February. And compound that with the fact that we can’t open only exacerbates the situation.”
Kiru said small businesses are grateful for some of the grants and government financial assistance that exist but unfortunately it’s nowhere near enough to be able to survive.
“We’re seeing not only businesses failing but the mental impact on a number of these business people. Divorces. There definitely are issues that are stemming when people are seeing their livelihoods, their life investments into their businesses, evaporating through no fault of their own,” he said. “Not to say the government is to blame but some of the restrictions that the government’s put into place and shut us down effectively is a part of that concern that many of these people are voicing.”
Retail Insider continues its Photo Tour series of Canadian malls to provide a window into shopping centres across the country that may be continuing to grow and expand while dealing with the effects of the COVID-19 pandemic. This edition takes us to the Avalon Mall, which is the leading shopping mall located in St. John’s, Newfoundland.
We asked the team at Avalon Mall to provide us with a glimpse of the mall during a typical day in January 2021, and they went above and beyond with providing our readers a photographic experience that would be beneficial for everyone. Our thanks go out to Donna Vincent, the General Manager of Avalon Mall and her entire team in Newfoundland. We’d also like to thank Elizabeth Engram (Manager, Marketing & PR at Crombie REIT), Marcel Elliott (Director, Leasing at Crombie REIT), and the team at Crombie REIT for providing the images for this tour.
Click for an Interactive Google Map
The Avalon Mall Overview
Avalon Mall is the premiere regional shopping centre in St. John’s, Newfoundland & Labrador. It’s the largest enclosed shopping mall in the province and will offer approximately 593,000 square feet of gross leasable area (GLA) upon completion of a three-year redevelopment project. Avalon Mall is owned and managed by Crombie REIT (“Crombie”).
Phase 1 of the $112M project began in 2017 with construction of a new parking structure, providing 875 additional parking spaces for shoppers and visitors. Vehicle access to Kenmount Road was redesigned and realigned, and the redesign and phased renovation of the centre’s interior common areas began with contemporary porcelain tile and acoustic ceiling tiles.
Phase 2 includes improvements to entrances and the exterior façade. Interior upgrades continue on the main level and in centre court, corridors, and atriums with upgrades to lighting, ceiling, and tile treatments. New washroom facilities were completed near the bottom of the food court escalators in 2019 — good washrooms are important for a first-class mall. The food court has been expanded with modern finishes, additional seating and furniture, and sorting stations that allow the mall to divert organic waste to an on-site composter.
2019 saw the opening of a new 50,400-square-foot Winners and HomeSense store, and a 30,600-square-foot The Rec Room by Cineplex. There was also a large number of additional retailers that joined the centre and will be highlighted as we go through the tour.
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Avalon Mall Leasing Plans- January 2021 (Crombie REIT)
Avalon Mall Leasing Plans- January 2021 (Crombie REIT)
Avalon Mall Leasing Plans- January 2021 (Crombie REIT)
The redevelopment of the common areas are complete, with a number of retailers scheduled to open in the next couple of months. There are also a few areas that are being redeveloped in the exterior of the property, but those should be completed by the summer of 2021.
Before we show interior photos, it’s important to stress that Newfoundland & Labrador have been on the low end of COVID-19 cases, with 6 total cases in the last 14 days and 398 total cases throughout the entirety of the pandemic. This is why you’ll see guests and employees without masks or various physical distancing measures that have been implemented in provinces across the nation.
Avalon Mall – January 2021 (Photo Crombie REIT)
When we were discussing the layout of this mall tour, the idea was to show three elements:
The progress of the expansion
The features of COVID-19 pandemic safety measures for guests
Additional photos of Avalon Mall
The Expansion at Avalon Mall
The Avalon Mall Expansion Area
The photo walk begins at H&M, flowing through to Sport Chek and ending at Mountain Warehouse.
H&M at Avalon Mall – January 2021 (Photo Crombie REIT)
In December 2020, Swedish fast-fashion retailer H&M opened a 21,740-square-foot location beside a soon-to-open 15,620-square-foot Old Navy store at Avalon Mall. H&M has been quietly expanding its base of stores in Canada, seeing success with its low-cost fashion model.
Avalon Mall – January 2021 (Photo Crombie REIT)
Adding tenants is an exciting time for a mall, especially when the exit of Sears gave the team an opportunity to re-imagine the offerings. This has been the case across the country as landlords look to backfill vacated anchor spaces.
Winners Homesense at Avalon Mall – January 2021 (Photo Crombie REIT)
Winners HomeSense relocated in 2019 to a 50,530-square-foot location with multiple windows that allow guests to see inside the store upon entry into the mall. Such a frontage is rare for an off-price retailer in a strong shopping centre.
Sport Chek Construction Hoarding at Avalon Mall – January 2021 (Photo Crombie REIT)
Directly across from Winners will be a 25,600-square-foot Sport Chek location, which has a tentative opening date of March 2021. Calgary-based FGL Sports (known as Forzani Group Ltd prior to a 2011 acquisition by Canadian Tire) operates a number of brands on top of Sport Chek, including Pro Hockey Life, Nevada Bob’s Golf, Atmosphere, and Sports Experts. The Avalon Mall Sport Chek won’t be as large or comprehensive as the retailer’s mega flagships, some of which span in excess of 75,000 square feet.
Gap Factory Construction Hoarding at Avalon Mall – January 2021 (Photo Crombie REIT)
GAP Factory will be joining the wing, along with a new Banana Republic, with both stores spanning 15,730-square-feet of retail space. The construction is all-hands on deck to get these stores up and running, which you can actually see in the GAP photo. It’s a positive sign that the GAP is actually opening a store in Canada as it closes other locations, including vacating Toronto’s Mink Mile completely.
Banana Republic Factory at Avalon Mall – January 2021 (Photo Crombie REIT)Expansion Map at Avalon Mall – January 2021 (Photo Crombie REIT)Tommy Hilfiger Hoarding at Avalon Mall – January 2021 (Photo Crombie REIT)
Tommy Hilfiger will be taking a 10,320-square-foot location, with a tentative opening set for Spring 2021. The US-based fashion brand operates a network of stores across Canada, many of them in outlet/off-price centres.
This will be a high traffic spot as it’s at another entrance to the mall and will be directly beside Five Guys and three locations that aren’t confirmed yet. When you’re looking at the leasing map, it’s interesting to note that the leasing team is still filling out their roster in locations ranging from 1,400 square feet to 3,750 square feet.
Skechers Construction Hoarding at Avalon Mall – January 2021 (Photo Crombie REIT)
Skechers will be opening a 2,520-square-foot location in spring 2021. The casual footwear and fashion retailer has a network of stores across Canada in malls, outlets and big-box centres.
Levi’s Construction Hoarding at Avalon Mall – January 2021 (Photo Crombie REIT)
Levi’s will also be joining the wing with a 2,060-square-foot store, which is less than half the size of the flagship at the Toronto Eaton Centre. Opened in 2018, that location featured the Levi’s Tailor Shop, a feature that allows guests custom embroidery and hemming services. Levi’s has been expanding its direct-to-consumer strategy by opening standalone stores across Canada — it’s a trend that we will continue to see into 2021 as brands increasingly move distribution away from multi-brand retailers such as department stores.
Sport Chek and Hakim Optical at Avalon Mall – January 2021 (Photo Crombie REIT)
A great location for the new Hakim Optical, which will cover 1,700 square feet in the mall expansion. We covered how Hakim Optical has been able to secure brand-defining retail locations, including Bay & Bloor at the entrance of the Mink Mile in Toronto. Toronto-based Hakim Optical has expanded from its home base across the country with well over 150 stores.
T Kettle at Avalon Mall – January 2021 (Photo Crombie REIT)
We haven’t had the opportunity to see a T.Kettle retail location in-person yet, so this was a pleasant surprise to see a location up and running. Retail Insider interviewed Doug Putnam (CEO, T.Kettle) prior to launch. The brand took over many of David’s Tea’s former storefronts after the retailer shut most of its locations following a bankruptcy filing last year.
Tip Top Tailors, Newfoundland Chocolate Company, and Winners HomeSense at Avalon Mall – January 2021 (Photo Crombie REIT)
Next to Hakim Optical is Tip Top Tailors, which has joined the area with a substantial 3,990-square-foot location. Personally, I love seeing new Tip Top Tailor stores, as I worked at a Jack Fraser menswear store at Aberdeen Mall in Kamloops, BC when I was in University. The “Jack Fraser” name was retired in 2005 and the company decided to rename all locations to Tip Top Tailors or merge with already existing in-market stores.
This particular location features a striking facade as part of the retailer’s new store concept.
Newfoundland Chocolate Company – January 2021 (Photo Crombie REIT)
Newfoundland Chocolate Company secured the corner, with a 1,000-square-foot presence with plenty of socially-distanced seating and an open concept. The lighting design really captures the eye.
You’ll also see variety retailer Showcase, which opened a 1,200-square-foot store and directly across from our next stop.
Mountain Warehouse – January 2021 (Photo Crombie REIT)
A 6,330-square-foot Mountain Warehouse location is next, which in our 2020 article floor plans was actually split into 3 different smaller-format retail offerings. The British travel and outdoor retailer has been expanding its base of stores in Canada since entering the market in 2014.
More Expansions, Relocations, and Renovations
In this next section, we’re going to be touring locations that may not be in the new expansion wing but are still exciting to share.
Avalon Mall – January 2021 (Photo Crombie REIT)
The Rec Room opened its first in-mall location in 2019 at Avalon Mall. On top of the entertainment value, this location has been a healthy addition to the property by way of creating a full-day experience. Visitors who are going to the Rec Room may continue to spend time (and money) in the mall, which is a huge benefit vs a stand-alone location like the Rec Room at the Roundhouse across the street from the CN Tower in Toronto.
Rec Room at Avalon Mall – January 2021 (Photo Crombie REIT)Rec Room at Avalon Mall – January 2021 (Photo Crombie REIT)
Laura Secord opened its newly renovated 870-square-foot store in November 2020. This was great news as we’ve seen a number of the Quebec-based chocolatier locations close in the last few months, including Bayview Shopping Centre and Cloverdale Mall.
Laura Secord, Sephora, and Lululemon at Avalon Mall – January 2021 (Photo Crombie REIT)
This photo also shows a Sephora and Lululemon location — both retail powerhouses. Beauty retailer Sephora now operates stores across the country, and Vancouver-based Lululemon is growing its base of stores in Canada as well as beyond by taking advantage of vacated retail space by other retailers.
Ardene at Avalon Mall – January 2021 (Photo Crombie REIT)Bath & Body Construction Hoarding at Avalon Mall – January 2021 (Photo Crombie REIT)
COVID-19 Pandemic Safety Protocols
The team at Avalon Mall were very proud of their success with implementations of safety protocols during the 2020/2021 pandemic. Even though Newfoundland has been able to escape the various lockdowns and infection rates as the rest of the country, they are still making guests feel safe through the use of education and branded signage.
Drone Photos of Avalon Mall and Woodgate Plaza
Below are a number of drone photos, provided by Overdrone Services, Inc.
Avalon Mall – January 2021 (Photo Crombie REIT) Avalon Mall – January 2021 (Photo Crombie REIT) Avalon Mall – January 2021 (Photo Crombie REIT) Avalon Mall – January 2021 (Photo Crombie REIT) Avalon Mall – January 2021 (Photo Crombie REIT) Avalon Mall – January 2021 (Photo Crombie REIT) The Brick and Toys R Us at Avalon Mall – January 2021 (Photo Crombie REIT)
Wrap Up of the Avalon Mall Photo Tour (January 2020)
And that’s a wrap! Join us for more photo tours in 2021. Retail Insider is enjoying the process of exploring malls across the country during a challenging time for the industry.
Our thanks again go out to Donna Vincent, the General Manager of Avalon Mall and her entire team in Newfoundland, and the team at Crombie REIT for providing the images for this tour.
Additional Photos of Avalon Mall During the Pandemic
The team at Avalon Mall sent through a number of amazing images of the mall, outside of the new expansion wing. Feel free to scroll through the photos below to see how the property is looking in January 2021.
Avalon Mall Leasing Plans (January 2021)
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Avalon Mall Leasing Plans- January 2021 (Crombie REIT)
Avalon Mall Leasing Plans- January 2021 (Crombie REIT)
Avalon Mall Leasing Plans- January 2021 (Crombie REIT)
Guest Services at Avalon Mall – January 2021 (Photo Crombie REIT)Crombie REIT Mall Administration Office at Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Lush at Avalon Mall – January 2021 (Photo Crombie REIT)Bath & Body Works at Avalon Mall – January 2021 (Photo Crombie REIT)Dynamite and Soft Moc at Avalon Mall – January 2021 (Photo Crombie REIT)Starbucks, CIBC at Avalon Mall – January 2021 (Photo Crombie REIT)Le Chateau at Avalon Mall – January 2021 (Photo Crombie REIT)Bootlegger and Foot Locker at Avalon Mall – January 2021 (Photo Crombie REIT)Foot Locker at Avalon Mall – January 2021 (Photo Crombie REIT)Bogarts Jewellery at Avalon Mall – January 2021 (Photo Crombie REIT)Envy at Avalon Mall – January 2021 (Photo Crombie REIT)Glamour Secrets at Avalon Mall – January 2021 (Photo Crombie REIT)Saje Natural Wellness at Avalon Mall – January 2021 (Photo Crombie REIT)The Body Shop at Avalon Mall – January 2021 (Photo Crombie REIT) Sports Experts at Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Crescent at Avalon Mall – January 2021 (Photo Crombie REIT)X Store at Avalon Mall – January 2021 (Photo Crombie REIT)Lids at Avalon Mall – January 2021 (Photo Crombie REIT)Garage at Avalon Mall – January 2021 (Photo Crombie REIT)Kearney’s and Central Barber Shop at Avalon Mall – January 2021 (Photo Crombie REIT)Bell Aliant at Avalon Mall – January 2021 (Photo Crombie REIT)
Avalon Mall Food Court
Food Court at Avalon Mall – January 2021 (Photo Crombie REIT)Tim Hortons at Avalon Mall – January 2021 (Photo Crombie REIT) Flavours Indian Cuisine at Avalon Mall – January 2021 (Photo Crombie REIT)Booster Juice in the Food Court at Avalon Mall – January 2021 (Photo Crombie REIT)Food Court at Avalon Mall – January 2021 (Photo Crombie REIT)Subway and Food Court at Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall Food Court – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Journeys at Avalon Mall – January 2021 (Photo Crombie REIT) Avalon Mall – January 2021 (Photo Crombie REIT)American Eagle Outfitters at Avalon Mall – January 2021 (Photo Crombie REIT)RW&CO at Avalon Mall – January 2021 (Photo Crombie REIT)CellIcon at Avalon Mall – January 2021 (Photo Crombie REIT)Eclipse at Avalon Mall – January 2021 (Photo Crombie REIT)GS Beauty Bar at Avalon Mall – January 2021 (Photo Crombie REIT)Telus at Avalon Mall – January 2021 (Photo Crombie REIT)Koodo and Wireless Wave at Avalon Mall – January 2021 (Photo Crombie REIT)Sephora at Avalon Mall – January 2021 (Photo Crombie REIT)Little Burgundy at Avalon Mall – January 2021 (Photo Crombie REIT)The Source, Jump+ and Scotiabank at Avalon Mall – January 2021 (Photo Crombie REIT)The Source at Avalon Mall – January 2021 (Photo Crombie REIT)Samuel & Co at Avalon Mall – January 2021 (Photo Crombie REIT)Aldo Shoes at Avalon Mall – January 2021 (Photo Crombie REIT)La Vie en Rose at Avalon Mall – January 2021 (Photo Crombie REIT)West 49 at Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Jump+ at Avalon Mall – January 2021 (Photo Crombie REIT)
Exterior Avalon Mall Photos
New Parking Garage at Avalon Mall – January 2021 (Photo Crombie REIT)Avalon Mall – January 2021 (Photo Crombie REIT)Lawtons at Avalon Mall – January 2021 (Photo Crombie REIT)New Entrance at Avalon Mall – January 2021 (Photo Crombie REIT)
