212: Summer 2020 Wave of Permanent Store Closures in Canada
This week Craig & Lee talk about the latest retail casualties which have begun closing stores as a result of or exacerbated by COVID-19. The discussion included independent retailers, national brands and international retailers that are shutting some or all stores over the next couple of months.
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This week on Retail Pulse Check, industry experts Craig Patterson and Stephen O’Keefe discuss the current state of the Canadian retail landscape as the country slowly enters new phases of reopening.
Topics covered included the future of retail innovation in a post-COVID world, the importance of mitigating for a potential second wave, and emerging consumer trends — such as an increase in luxury spending — and the potential reasons why.
Patterson and O’Keefe also spoke about the intricacies of implementing regulated mask mandates for retailers and the disparities between Western and Eastern Canada when it comes to navigating the challenges associated with the ‘new normal’.
Craig Patterson is the founder and Editor-in-Chief of Canada’s most-read online retail industry news publication, Retail Insider. He is also a Director at the University of Alberta School of Retailing, as well as a research consultant at Retail Council of Canada. Craig has studied the Canadian retail landscape for over 25 years, and has also been involved with strategy pertaining to urban revitalization in several cities, as well as retail and shopping centre-related design. He is an industry consultant who also gives retail tours and and is a public speaker. He is a graduate of the University of Alberta and holds a Bachelor of Commerce degree and Bachelor of Laws degree.
Stephen O’Keefe, Founder @Bottom Line Matters
Stephen O’Keefe is a 30 year veteran of the retail industry having worked with major brands such as Sears, Hudson’s Bay, and Walmart where he was Vice President of Loss Prevention and Risk Management. He founded Bottom Line Matters as a source for retailers of all sizes to draw upon his experience and expertise and deal with what matters – maximizing their bottom line. Stephen clients have included major retailers, BIAs, vendors as well as the Industry Association itself. He was awarded the Lifetime Achievement Award for his work with the retail loss prevention community, sharing best practice to combat shrinkage and advocating for legislative changes to support retail business.
EXTERIOR SHOT OF FRESHSLICE PIZZA LOCATION IN CROSSIRON MILLS JUST OUTSIDE CALGARY. PHOTO: FRESHSLICE PIZZA
The unique Freshslice Pizza concept, with its base in British Columbia, is aggressively expanding its brand as it looks to grow across the country and the United States.
The company currently has 74 locations in British Columbia and one in Calgary with another Calgary location opening soon. The company has plans to open 120 locations across Alberta over the next 10 years and 200 in Ontario during that same period.
“As we grow across the country and expand into the United States, the choice of Alberta first, and specifically Calgary, strategically made the most sense. The economic climate, coupled with the marketing environment, is ideal for our brand. We know customers will love our multi-grain dough and low-fat mozzarella cheese. We offer a healthy product presented at a price that will offer Albertans an unparalleled value versus any competitor,” said Ray Russell, Founder and CEO of Freshslice Pizza.
The company opened its first location in 1999 on Davies Street in Vancouver. Anyone interested in becoming part of the Freshslice growth plans can contact albertafranchising@freshslice.com.
“We primarily operate in the quick service restaurant space. We feature pizzas but our business model is a little bit different than every other pizza chain in that we focus on quick service pizza by the slice,” said Tom Horler, Vice-President of Marketing and Legal Affairs. “So you come into a Freshslice location and there is a variety of different pizzas that are on display in a temperature controlled and humidified controlled display case.
EXTERIOR SHOT OF FRESHSLICE PIZZA IN VANCOUVER. PHOTO: FRESHSLICE PIZZA
“Depending on the time of day there could be six to eight pizzas on display which you can choose one, two or as many slices as you like. You can mix and match your own pizza and complement that with a beverage or dessert.”
Horler said about 70 percent of customers come into the restaurant and choose a slice or order a whole pizza which is cooked fresh for them. Delivery and pickup is about 30 percent.
“Our business model is quite different than the typical pizza restaurant where they focus primarily on delivery. We do both.”
Horler said the typical restaurant size is about 780 square feet with about four to 10 chairs for people.
“We’ve really fine-tuned our model and we’re ready to take off right across the country,” he said. “We’re focusing primarily with our first partner in Alberta and then from a corporate perspective we’re starting to expand in Ontario. We also plan on opening up Manitoba and Saskatchewan hopefully before the end of the year and then we’re going to head down south where we have plans to open up in Washington and in Oregon next year.”
FRESHSLICE PIZZA PLANS AGGRESSIVE CANADIAN EXPANSION FOR THE REMAINDER OF 2020
Four new locations will be added by the end of this year. The company expects to expand by 25 stores in 2020-21.
“I would say by 2022 we would add a total amount of new stores by 30,” he said.
Jamie Cooper, Vice-President, Ontario, said the company will expand to the Ontario market with its first store in September in Toronto. Cooper said the Ontario locations will be about 1,000 square feet with seating to accommodate 16 people.
He said the plan is to expand to 200 locations within 10 years in Ontario.
“We’ve got a value proposition that kicks the s..t out of our competition . . . Because we have a royalty structure, we don’t make any markup on any product outside of the dough that we sell. It allows us to put much more product onto the pizza at similar food costs to our competition. It’s a pretty disruptive model. It’s very value orientated to the market and we should thrive in both good and recessionary times,” said Cooper.
Horler said one of the aspects that allows the company to grow at a better clip than most is the fact it doesn’t charge royalties and it doesn’t charge advertising fees.
“So our retained earnings per retail dollar amount are significantly higher than our competition as a result. It provides more franchisees with a lower cost model all the way around. It drives better value than our competition can do at the consumer level. Significantly,” added Horler.
FRESHSLICE FOCUSED ON CALGARY FIRST WITH SECOND LOCATION COMING SOON
In the Calgary area, the first location opened earlier this year in the CrossIron Mills shopping centre in Rocky View County which is just north of the city limits. The second location will open this month in the East Village neighbourhood which is just behind Calgary’s City Hall in the downtown core. It will be part of the main retail level of the new 5th & 3rd mixed-used development.
“We are looking at a really aggressive approach over the next 10 years of about 120 locations,” said Lorna Edwards, Director of Development for Alberta. “This location that we’re opening up in the East Village will be part of that and it follows closely on our opening earlier this year at the CrossIron Mills mall.
“We chose a real premier location to launch the brand here in Alberta to really kind of showcase the strengths of the features. The East Village location is going to be followed by one additional one in Calgary that we’ll be announcing in the next couple of weeks. And we’ve just finalized on a location up in Edmonton.”
The Halal Guys is bringing its quintessential New York City street cart food experience to Western Canada for the first time.
THE HALAL GUYS IS COMING TO CALGARY
Franchisee Youssef El Sweify has signed a multi-unit franchise deal to bring at least five locations to the Calgary area – marking the concept’s fifth international deal and third in Canada, building on existing locations in Toronto. He plans to open the first location in the Fall.
The Halal Guys is the largest American Halal Street Food concept in the world. Founded in 1990 by Mohamed Abouelenein, Ahmed Elsaka, and Abdelbaset Elsayed, The Halal Guys is now franchising worldwide via a new fast casual/QSR restaurant format.
Ahmed Abouelenein, the company’s CEO, said there are 94 locations in the world currently with 200 in the development. In Canada, there are two operating in Toronto.
Abouelenein said the company has sold five units each in Alberta, Toronto, and Vancouver. The 15 units are under development.
“I think the Canadian market we can develop there at least from 50 to 100 units easily in the next 10 years,” he said.
He said each franchisee of the 15 is required to open one store a year.
“Canada is a very unique market when it comes to food. I know there are a lot of people that will love to eat our food there. In addition we have a lot of customers in the States that are from Canada that love our food and always ask us to bring our food to different parts of Canada.”
The Halal Guys became a well-known New York City brand largely via word-of-mouth thanks to Muslim cab drivers in the 90’s who appreciated delicious, fresh and well-priced American halal food.
“It was a very good valuable meal that was cheaper for our customers,” said Abouelenein. “We focused on our customers, focused on the food quality we serve to the customers. The popularity of the food cart grew a lot and we came to put our first corporate location around mid-2014 in New York City and we started introducing our same menu items that we serve at carts with additional side items.
“That’s how the brand started over the years. The customers loved the food, very unique brand. When the brand started, it was mainly focused on serving halal foods to Muslim cab drivers in the early 1990s because there was no halal food in the city at that time. And throughout the years the brand grew and the halal concept grew from only Muslim cab drivers to everyone and today 90 or 95 per cent of our customers are not Muslim. So the brand is everyone. It’s all about the food we serve to the customers. We take pride in serving the food and we’ll continue doing what we’re doing.”
Abouelenein said the company is extremely excited to enter the Canadian market.
The Alberta locations will include Calgary, Canmore, and Banff.
“The Halal Guys is a unique concept, and there is nothing like it in Canada. The demand for The Halal Guys is very strong here, and we are extremely excited to be opening in the greater Calgary area,” said franchisee owner Youssef El Sweify. “Our goal is to have the first restaurant open by Fall.”
The Halal Guys is partnered with Fransmart, the industry-leading franchise development company behind the explosive growth of brands like Five Guys Burgers & Fries and QDOBA Mexican Grill, as its exclusive franchise development partner to grow the brand. The concept is actively looking for experienced multi-unit foodservice operators to develop additional franchises in major markets across the United States and internationally.
The New York Post calls The Halal Guys “perhaps the city’s most famous open-air dining destination”. The Halal Guys is the #3 Most Yelped business in all of NYC, and as reported by Time Magazine, it is in the Top 10 Most Yelped businesses in the United States. Called “one of the longest-running and best-known food-cart businesses in New York City” by the New York Times, The Halal Guys was named Buzzfeed’s #1 Most Popular Food Truck for 2013, and was featured on Bloomberg Television and Fox News.
The COVID-19 pandemic with the resulting social distancing measures has had a dramatic impact on Canada’s retail industry creating a number of trends that are accelerating, reversing, or emerging.
Research by CoStar Group Canada said among the accelerating trends is the fact that since the start of the pandemic, more retailers are adopting ecommerce, downsizing to smaller and more efficient space, repurposing mall space for micro-fulfillment, and adding coffee bars or services to maximize their usage.
Additionally, iconic brands are facing hardships while essential retailers are better positioned to thrive. Retail bankruptcies are causing property managers to get creative with their space and repurposing retail space for other uses such as warehouses to support last-mile delivery.
E-COMMERCE IS BOOMING IN THE WAKE OF COVID-19
Roelof van Dijk, Director of Market Analytics, Canada at CoStar Group, said the biggest and most talked about trend these days is the boom in ecommerce as a result of the current pandemic.
“That’s taken off like wildfire,” he said. “It now equates to almost 10 percent of retail sales. The whole point there is when you’re stuck at home and still need to do some shopping that’s the avenue that people have taken. Adoption of that is just speeding up. Now that more and more people have used ecommerce they find they like the convenience.
“That goes hand in hand with the curbside pickup, the buy online pickup in store situation.”
DOWNSIZING IS BECOMING INCREASINGLY PROMINENT
He said the idea of showrooming and downsizing retail space is likely going to become even more prominent as we go forward.
“As more people adopt the ecommerce online avenue then you don’t need as large of a store to have all the inventory you once needed to have in the store. You can take a lot of that inventory into a more industrial type space if you want to do that,” said van Dijk.
“We’ve heard a lot of discussion about what to do with some of this retail space and we’ve seen some listings come up where they’re actually advertising it as industrial space. There was one that came up in Mississauga, an old Zellers/Target space and it’s part of a mall and it’s being offered as either retail or industrial space and there’s two separate rents depending on what the user decides to use it for.”
In the U.S., he said Amazon has expressed interest in some of the old department stores’ space. Or space could be used as curbside pickup or part of the last mile of the supply chain.
“For retail it comes down to the property manager and the retailers are going to have to get very creative in how they are using space,” added van Dijk. “You also see a lot of discussion about what to do in the parking lots. We’ve been talking about this for years in how to repurpose some of these parking lots that are underutilized.
“Vacancy is moving up. It was moving up prior to COVID but it’s definitely going to be moving up a lot faster as we go through the next year, two years.”
In terms of reversing trends, fitness centres, restaurants, and experiential retailers are struggling to reopen and are no longer primary drivers of new demand. Since migration patterns could change, suburban retail could gain traction. People are also now spending more on groceries than bars/restaurants.
Van Dijk said some of these reversing trends are temporary.
“When you look at what has happened in shopping malls specifically over the last 10 plus years, there’s been a big movement to experiential retail. A big movement to put in fitness centres, restaurants, that type of thing,” he said. “Those types of uses were driving traffic. It was that diversification play, get away from competing with ecommerce as ecommerce moves up the food chain.
“You’re starting to see obviously a bit of a reversal on that because these were tenants that were able to pay premium rent and now when their capacity is being reduced 50 percent, or even less than that, these are slow to reopen. Will they be able to remain afloat going forward if they’re only at 50 percent capacity?
“Until we get to the other side of this and we understand what this new normal is going to look like, these are going to be uses that are going to have a hard time expanding and not necessarily the easiest sell to put into your mall knowing that they might not be able to afford the rents they once were able to afford because of capacity issues and increased costs associated with cleaning and so forth.”
CUSTOMER’S PERCEPTION OF CLEANLINESS IS CRITICAL FOR SUCCESS
And in new trends, the perception of cleanliness is critical to make customers comfortable moving forward. Many are now activating outdoor areas, outdoor eating or curbside pickup, and changing layouts to drive future sales. Interestingly, health and safety and BOPIS (buy online and pick up in store) and curbside pickup may be an answer to solving last mile issues.
“Outdoor uses are key right now and a lot of municipalities have fast-tracked restaurants’ ability to open up patios and so forth and expand patios really to help get that going and keep some of these businesses afloat over the next few months,” said van Dijk. “Capitalizing on that outdoor space, capitalizing on those exterior door entrances, is key but come November you’re not going to be able to use those spaces as well as you have been for obvious reasons in Canada.
“The other part of it is the idea of cleanliness. It’s one thing to be clean and the other thing to really hit home the impression that you are taking cleanliness into account and people are going to be very conscious of that. They have been but even more so. There has to be that appearance of cleanliness. It’s critical to make the customer comfortable. Health and safety concerns are very important.”
He said drive thru demand will increase because many people are avoiding public transit. The trend has been for retailers in the past to put their stores in locations that are transit-oriented but now there is talk that the commuter pattern will change as a result of COVID. The question is what impact that will have on where retailers look to operate.
Canadians have been COVID-19 ‘Tweeting’ over the past five months, and retail appears to be a hot topic amongst users. The COVID-19 Twitter conversation sees a new Tweet every 45 milliseconds globally and Canadians have been contributing to the pandemic discourse. Many are using the social media platform to discuss their rapidly-changing consumer habits. Others are using their reach to highlight the Canadian brands who have remained the industry’s backbone during this difficult time.
PEOPLE ARE COMPARING CHANGING CONSUMER HABITS ON TWITTER
Recent data taken from Twitter showed that 68% of Canadians said their shopping habits will change post-COVID, with a clear trajectory towards ecommerce and online shopping.
Research showed that amongst the new habits cited most frequently on Twitter by Canadian consumers, physical visits to stores were on the decline and home delivery services were becoming increasingly more popular. People were also talking a lot about using self-service checkouts more frequently and wishing to spend limited time within stores, choosing to browse online going forward.
In March — when Canada entered lockdown — Canadians were blowing up the platform with mentions of household items such as toilet paper, soap, and gloves. In correlation to this, the most-mentioned household brands at that time were Kleenex, Clorox, and Charmin, in that order.
In the dining sphere, data showed the Canadian Twitter conversation about food takeout and delivery had increased by +4x between January-May 2020 when compared to January-April 2019. Uber Eats and Door Dash fared most favourably on Twitter in terms of delivery services.
CONSUMERS ARE SPOTLIGHTING RETAILERS WHO SHONE THROUGH THE COVID STORM
In addition to comparing consumer habits, Canadians are also flocking to Twitter to discuss their favourite retailers. Across the country brands have seen exponential growth in overall Twitter mentions since January. Engagement has been extremely high for particular Canadian retailers — such as Loblaws and Canadian Tire — and the data is showing prolific brand mention growth for many of the big box stores existing within the Canadian retail landscape. Brands that have fared well include:
Loblaws saw a brand mention growth of +145.27%
Walmart saw a brand mention growth of +65.28%
Costco saw a brand mention growth of 187.59%
Home Depot saw a brand mention growth of +166.98%
Canadian Tire saw a brand mention growth of +72.91%
McDonald’s saw a brand mention growth of +43.16%
In Ontario alone, growth mention increased immensely for the same brands. Data below shows the growth statistics:
Loblaws saw a brand mention growth in Ontario of 227.77%
Walmart saw a brand mention growth in Ontario of 64.09%
Costco saw a brand mention growth in Ontario of 318.54%
Home Depot saw a brand mention growth in Ontario of 218.45%
Canadian Tire saw a brand mention growth in Ontario of 15.36%
McDonald’s saw a brand mention growth in Ontario of 52.46%
Data generated from Twitter also showed that 84% of Canadians agree that brands should communicate with customers on initiatives being implemented in a time of crisis. And it would appear that brands are doing just that, with an overwhelming positive consensus emerging from the Twittersphere. Canadians are generally impressed with how retailers conducted themselves; feeling heard and appreciated during this time.
CANADIANS KEEPING TWITTER POSITIVE DURING TURBULENT TIMES
The positive dialogue on Twitter amongst Canadians during the COVID-19 pandemic is somewhat opposing to the questionable reputation the social platform has been known to have. Many are quick to criticize Twitter — in comparison to other social media platforms — for its prevalence of inflammatory or combative discourse. The ‘cancel culture’ that is emerging from media outlets is rampant on Twitter, and a global pandemic is sure to heighten tensions.
To date however, the ‘hero pay’ conversation is really the only controversial retail topic that appeared to trend during this time. Currently under fire for retracting the COVID wage increase, Canadian grocerants such as Loblaws, Metro, and Sobeys are navigating their first COVID-19 scandal. In saying that, thousands have also praised these grocery stores for their tireless efforts to keep Canadians equipped with essentials during this time.
SCREENSHOT OF MOLSON CANADIAN TWEET ANNOUNCING ITS #MAKEITCANADIANBEER INITIATIVE. PHOTO: TWITTER
In recent weeks the #SupportLocal hashtag has emerged frequently — increasing by 60% in Canada from March to April— as Canadians encourage each other to support their local businesses. The month-over-month growth of the hashtag can be seen in some Canadian cities listed below. These numbers compare the total #SupportLocal mentions in April 2020 to the hashtag’s total mentions in March 2020:
Vancouver +98%
Calgary +29%
Edmonton +56%
Ottawa +63%
Molson Canadian has taken this unexpected opportunity to spotlight smaller Canadian-founded brewers on Canada Day with the hashtag initiative #MakeitCanadianBeer. The iconic Canadian beer brand has created “the most Canadian case of beer ever” by replacing their traditional cases of Molson beer with local partner breweries from across the country. In an attempt to support and leverage smaller Canadian breweries, Molson is giving people the opportunity to build their own case of beer by selecting brands from participating brewers in their local area. Molson used Twitter to garner attention and Canadians were more than happy to disseminate the good news across the platform.
SCREENSHOTS OF NO NAME BRAND TWEETS DURING COVID-19. PHOTOS: TWITTER
SCREENSHOTS OF NO NAME BRAND TWEETS DURING COVID-19. PHOTOS: TWITTER
Another brand using Twitter to connect to its customers during this time is Canada’s iconic Loblaws No Name Brand. Taking a humorous stance on aspects of lockdown everyone is struggling with, the brand has been applying its famous yellow background and minimalistic black letter to create fake “haircutting guides” and “zoom backgrounds”. The posts receive great traction, with humorous and positive conversation ensuing amongst Twitter users.
Molson Canadian and No Name Brand then went on to have an unexpected back-and-forth banter about their COVID-related initiatives. The general Twitter discourse appears to have remained overwhelmingly positive and highly interactive during this unprecedented time. Certainly generating some much needed buoyancy during this heavy time.
SCREENSHOT OF MOLSON CANADIAN AND NO NAME BRAND TWEETING ONE ANOTHER. PHOTO: TWITTER
SCREENSHOT OF MOLSON CANADIAN AND NO NAME BRAND TWEETING ONE ANOTHER. PHOTO: TWITTER
It’s been really great to see such positivity within the Twitter community, especially during such a difficult time,” said Twitter Canada’s Head of CPG, Retail and Dining, Karen Zuccala. The outpouring of support from both consumers and businesses is obvious. People are supporting their local businesses and bigger brands are spotlighting the smaller ones. Twitter, when used correctly, is a safe space for people to engage and interact with each other and the brands and retailers they love the most.”
The world of eCommerce is cut-throat, crowded, and competitive. You need to do all you can to win over more customers, and there’s only so far that you can slash your prices. Web accessibility in Canada and beyond is fast becoming an important advantage for eCommerce sellers who want to increase revenue and avoid costly lawsuits.
Consumers with disabilities make up a significant slice of your potential customers, with working-age people with disabilities possessing $490 billion in after-tax disposable income in the US, roughly the same as the African-American market. The disabled are also more likely to shop online, to avoid crowds that shove and push them aside, shop assistants who ignore them, and overwhelming lights and noise, but if your online store is one of the 98% that don’t meet WCAG 2.0 accessibility requirements, you’re pushing them all away.
COVID-19 only sharpened the problem. Many elderly people had never bought anything online before the coronavirus arrived, but then they had to try to understand confusing online instructions, unclear purchase processes, and non-intuitive website hierarchies alone, because lockdown meant that no one could come round to assist them. Bear in mind that people aged over 65 are significantly more likely to have a disability than younger shoppers.
With so many good reasons to run an accessible store, what is holding online vendors back?
The enormity of the task (or so they believe).
Online sellers struggle to achieve full web accessibility.
Full web accessibility is easy to say but much harder to achieve. It demands that you make multiple changes to your source code so that you can:
Enable anyone who can’t use a mouse, for any reason, to navigate the entire site using only the keyboard, including popups and forms;
Simplify the language and the purchase journey so that shoppers with cognitive decline or cognitive difficulties can choose their products and complete their transactions;
Support the screen readers used by blind people to browse the internet, including coding links, icons, and buttons correctly;
Adapting the colour, size, spacing, font, and contrast ratio of the text, enlarging the cursor and clickable fields, and addressing other usability issues;
Stopping all animations and flashing gifs that could provoke a dangerous seizure in anyone with photo-sensitive epilepsy.
Most eCommerce vendors and site owners don’t have the tech know-how to carry out these changes, and/or are using a marketplace that doesn’t support full web accessibility. Accessibility service providers have the expertise to identify and correct accessibility issues but their services are expensive and can take weeks to complete.
It’s no wonder that vast numbers of online sellers are tempted by free accessibility plugins, but do they deliver on their promises? Unfortunately, the answer is No.
Free accessibility plugins are a mirage
Free and low-cost plugins like WP Accessibility and UserWay claim to fix accessibility issues on websites and online stores, but this is very far from the truth.
To begin with the positives, free accessibility plugins succeed in correcting most usability issues. They mostly generate an accessibility widget that allows the user to adjust the colour and contrast ratio; change the spacing and size of texts; and enlarge the cursor and the clickable field for buttons. Some of them can also adapt text alignment and fonts.
Although these are all useful adjustments that improve matters for visitors with low vision or colour-blindness, they don’t add up to full accessibility. Abut 80% of accessibility issues concern support for screen readers and keyboard navigability, so free plugins only fix 20% of your online store.
Keyboard navigation is crucial for millions of users who have amputated limbs, arthritis, motor disorders, or muscle weakness, and for able-bodied consumers with a broken arm or even a broken mouse. Although many plugins help support keyboard-only navigation, like creating a visible focus around web elements, none of them can cope with online forms, popups, dropdown menus, or clickable links and buttons.
That means that a visitor with disabilities may make it all the way to the payment page, but then be unable to complete a transaction because they can’t fill in the fields on your payment form without a mouse.
None of these free plugins support screen readers, either. One claims to provide alt tags, but that’s not enough. Another sidesteps the issue by providing its own screen reader, but it isn’t one that’s used by the majority of the blind community. There isn’t a single free plugin that delivers the role building, ARIA attributes, image alt tags, and navigational support that blind consumers need for their screen readers, effectively cutting them all off from your site.
On top of all that, you won’t find a free plugin that can simplify bewildering jargon or make sense out of confusing website structures to guide shoppers with cognitive impairments through your site. Nor do any of them stop animations and flashing gifs.
Free web accessibility plugins will cost online sellers a lot of money.
Web accessibility is fast becoming non-negotiable for eCommerce sellers, but the free plugins that promise to help them achieve it are nothing but a mirage.
The bottomline verdict is that plugins like Userway and WP Accessibility aren’t able to meet the many complex requirements for WCAG 2.0 accessibility compliance, leaving frustrated consumers to find a different store and online sellers vulnerable to accessibility lawsuits.
The solution? Use comprehensive web accessibility solutions like accessiBe or Level Access that actually deliver fully ADA complaint websites. True, they won’t be free, but your website will be accessible.
Ralph Tkatchuk
Ralph Tkatchuk is a freelance data security consultant and expert with over 9 years of field experience working with clients of various sizes and niches. He is all about helping companies and individuals safeguard their data against malicious online abuse and fraud. His current specialty is in eCommerce data protection and prevention. You can reach Ralph via Twitter (https://twitter.com/TkatchukRalph).
Top Canadian grocers testified before a parliamentary standing committee last week to explain why all COVID-19 incentive programs were cancelled within hours. Most grocery store and distribution center employees were paid extra at the beginning of the pandemic, only to see wages now go back to pre-COVID levels.
CEOs who testified were Loblaws’ Sarah Davis, Empire Company’s (Sobeys) Michael Medline, and Metro’s Eric Laflèche.
CEOs OF CANADA’S TOP GROCERY STORES DISCUSSED HERO PAY TERMINATION
Witnesses testifying before parliamentary committees are often used as political puppets to support underlying agendas. This session was no different. Questions were all over the place. CEOs were questioned about farmers, wines, beer sales, and everything in between. Discussions on the safety protocols put in place in the stores were confusing at best. MPs posed questions that were likely inspired by lobby groups who had got to them, wanting to make a point. Grocers are an easy target and are disliked by many, starting with farmers. But to be fair, most farmers have no idea of how complicated food distribution can be. Loblaws, Sobeys, and Metro employ more than 500,000 Canadians. Such a workforce requires strategic coordination.
The two-hour session was simply painful. If it were a TV show, it would have been called “The Empress, The Player, and The Annoyed”. Davis, the Empress, stayed on point, despite the committee’s efforts to throw her off her game. While Medline played along as best he could, Laflèche was clearly irritated by the entire thing.
SOBEYS GROCERY STORE EXTERIOR
Based on the tone of some of the remarks made by committee members, it is difficult to understand what was accomplished in 2 hours. There was no attempt to fully understand how food distribution works in Canada. At least, it was not apparent. Most importantly, it was not clear why only three companies were called to testify the cancellation of their COVID-19 pay programs, while no other companies such as Walmart or Save-On-Foods were summoned to testify. Retailers who did not offer any sort of pay premium were not summoned either.
Many questions suggested that MPs suspected grocers were colluding. Fixing bread prices, which occurred over 14 years is one thing, but talking amongst grocers is something totally different. It is not illegal for grocers to talk amongst themselves. Farmers, processors, wholesalers, and grocers around the world do it all the time. It is called co-opetition. Many companies which compete against each other face similar challenges these days and need to share information, courteously. Climate change, plastics, currency fluctuations, energy costs, are some of the challenges that require information sharing within an industry. COVID-19 is the latest example. The intent is not to favourably change market conditions, but it is rather to understand how the sector itself can cope with unprecedented challenges faced by all simultaneously. Hockey players, for example, who compete against each other can be friends. It is the same in the food industry. Based on the evidence provided during the testimony, nothing suggests that grocers were in fact conspiring.
That said, companies missed an opportunity and should have admitted that these programs were ill-designed from the start. It was clear from the beginning that pandemic pay programs, also referred to as “Hero pay”, would not end well. If companies wanted to reward employees for their work, one-time bonuses would have been more appropriate, and not temporary salary increases. This is what happens in other sectors of our economy. Increasing payroll expenses by 10% to 15% would make most grocery stores unprofitable. In fact, even with current wages, the Canadian market is likely overstored, and many will close over the best year.
METRO GROCERY STORE EXTERIOR
As for the committee itself, the lack of respect towards leaders in the food industry was irritating. Anyone who appreciates the work that was done for weeks during the pandemic would believe it was nothing short of a miracle. Employees played a very important role, no doubt, but so did leadership.
Grocers are not perfect. One may dispute decisions made by companies and how employees are treated, but salaries and working conditions are set by relying on a high-volume, low-margin business model. It has been like this for years. Higher wages would likely result in higher food prices, so MPs need to be careful with what they wish for. Food security in Canada is a paramount issue, especially now. The pandemic has made us realize that the model needs modernization.
There is a collective call for change, and all three CEOs who showed up in Ottawa are very much aware of it. They have some work to do. But the government needs to play a part as well. A guaranteed income for all has only gained currency throughout this pandemic. Let us hope the crisis we have all experienced will not go to waste.
A recent survey by Ipsos, the world’s third largest market research company, found that Canadian shoppers today are more thoughtful of their spending and they are taking more time to research online before making their purchases.
BRANDS NEED TO WATCH FOR CHANGING CONSUMER BEHAVIOUR POST-COVID
Therefore, brands and retailers need to be prepared for this elevated behaviour, especially as they head into planning for the busy fall/winter Holiday shopping season.
“As companies start to make plans for the busy, make-or-break Holiday shopping season, they will need to have the latest information on shopping trends in order to make the best decisions possible and adapt to a rapidly changing consumer landscape. Any pains in operations or fulfilment today will be amplified as we head into the busy fall shopping season,” said Naumi Haque, Senior Vice President Ipsos.
“Not surprising one of the key things was that many Canadians are shopping online and that’s happening across categories. Groceries is where we saw the biggest shift. Almost a doubling of people using online grocery in about a month. From a broader context, we looked at sentiments for Canadians and we found that the current sentiment related to COVID has sort of normalized.
“Canadians have surpassed the preparation and the adjustment phase where they would have been stocking masks and pantry loading and things like that, over two thirds are now adjusting or acclimatizing to what we’ve been calling like a new normal situation. And I think part of that is we’re seeing purchases in non-essential categories increase as well. Fashion and apparel and home and electronics are starting to see an uptick as well.”
Haque said much of the early volatility in consumer behaviour is now starting to normalize where retailers can make plans for the back half of the year or the next 12 to 18 months because they can start to predict what that time period is going to look like.
CANADIANS ARE STILL REACTING TO THE FINANCIAL IMPACT OF COVID-19
According to the study, Canadian consumers are still reacting to the financial impact that the COVID-19 pandemic has had on them, with over a quarter delaying or cancelling major purchases (28 percent). As a result, most consumers (61 percent) also agree that they are being more mindful about how much they spend, and nearly half (46 percent) are being more cautious by spending more time researching purchases online before buying them.
The survey also found that three-quarters (75 percent) of Canadians are making fewer trips to the store because of social distancing measures, half (48 percent) are worried about safety precautions taken by delivery companies and a third (34 percent) are still stockpiling food items and personal care products.
“The accelerated growth of digital is being felt across categories, and especially in grocery and personal care. The number of consumers using alternative grocery fulfillment options like curbside pick-up and delivery nearly doubled within a month and high consideration provides ample opportunity for future growth of these platforms,” said Ipsos.
Haque said retailers are planning for the future and what that might look like. They have to invest in understanding how the landscape is changing.
“There’s definitely companies out there that are reluctant to invest in the research because they don’t want to commit the budget or they feel like it’s not worth it because things are going to get back to normal. It’s like ‘oh this is a blip. It’s a pandemic. It will go away’. But I think the fact of the matter is what we’re hearing from consumers and we’re seeing in the data this is the new normal for at least the next 12 months,” said Haque.
“You can’t develop a strategy for a 12-month period being blind to what’s happening with consumers. There’s new consumer segments out there. There’s new consumer needs and shopping occasions that didn’t exist before and we don’t touch in depth on that in the study but we’re doing a lot of custom work with clients to help them understand that.
“Just understanding that this is going to be a longer haul and making sure we have the right information is one thing they can do. The other thing is that it’s going to be a digital fall/winter. The trend is going that way anyway. Every year we see more digital and omnichannel behaviour. But this holiday season we know is going to be much more digital. There’s a lot of general best practices around that. We want to encourage retailers to think about that.”
He said customers are going to want to check inventory before they go online. They are going to research online before going to a store. They won’t want to spend time in a store particularly if there are continued safety concerns.
“So they’re going to do a lot more research up front,” added Haque. “They’re going to be scrutinizing their purchases more. They’re doing more research around price and being mindful of how they’re spending. Using mobile first. We’ve seen mobile trends increase a ton . . . Anything retailers can do to help consumers reduce the amount of time in store using mobile is going to be a really important measure for retailers and for brands.
“For a lot of these activities, consumers don’t really know how to go about shopping. They don’t understand if they go to a mall do they line up outside, do they line up inside. Do I need a face mask? Do I not? Should I have kids? Are there safety measures in place? Around the food court? There’s just a lot of uncertainty so I think communicating to consumers and making sure retailers and brands are communicating in terms of all the measures they’re taking and what are the mechanics of shopping I think is going to be super important.”
In response to high demand, and to provide more for the Crate & Barrel Canadian audience, the baby and kids home furnishing brand debuted at the Interior Design Show (IDS) in Toronto.
Following the online launch at crateandbarrel.ca, Crate & Kids products rolled out in five Crate & Barrel Canadian stores including: Calgary, Edmonton, Mississauga, Toronto, and Vancouver.
Crate & Barrel also has a store in Laval in the Montreal area but that store does not have the new concept yet.
“Crate & Kids is all about creating a creative home for families. If you think about the Crate & Barrel brand, we’re kind of an extension of that. It’s this design forward look but Crate and Kids has a real kids’ component to it and that we’re all about self-expression,” said Alicia Waters, Vice-President of Growth Strategies for Crate and Barrel.
“So you’ll see us presented in a really playful and unexpected way but it’s still very soft. It feels very good. But we do play off everything you know about Crate & Barrel. So great quality furniture, great quality in general. Just kind of a similar presentation.”
Crate & Kids is Crate & Barrel’s baby and kids home furnishing brand that combines modern design, functionality, and quality and safety into their furniture and accessories. Dedicated to quality, Crate & Kids is design-forward and imagination-powered, with safety and sustainability at its core, says the retailer. The brand’s newest collection for Spring is modern and unexpected, with a playful aesthetic, aimed to inspire the self-expression of new parents and their kids through thoughtful and meaningful design.
PHOTO: YELP
CRATE & KIDS LEADS WITH ITS FURNITURE ASSORTMENT
Waters said Crate & Kids really leads with its furniture assortment. It has a strong nursery and kids’ bedroom collection. Customers can find everything from storage pieces to toys to teepees to textiles that are soft, comfortable and organic. But the bread and butter is the bedroom collection – cribs, beds, storage pieces.
There’s about 1,500 square feet of this new concept within the larger Crate & Barrel stores.
“Moms can come in and take care of the needs of their families in addition to the rest of the house,” said Waters. “The other big piece is that Crate & Kids is predominantly online. So about 80 percent of our sales are done online.”
“It’s a natural extension on both ends. From a Crate & Barrel standpoint it’s a natural extension for us to go into kids. Kids is a $5 billion segment of furniture alone. So it’s a huge opportunity to kind of bring Crate & Barrel style into this industry. So I think for us it was a natural extension.
“We also think there was a real hole in the marketplace for our look and our design aesthetic which really is soft and playful and unexpected and has a lot of cultural relevance. There were those opportunities that we’re really addressing as a sub brand.
“And from a Canadian standpoint, again, it was a natural next step fo our neighbours obviously within North America. It’s a market that’s super important to us because we’re all about home and family and you’re right here and it’s just a great market for Crate & Barrel in general but we wanted to bring kids. The interesting thing is we heard about this opportunity first from sales associates who told us that moms were coming in and asking. They had seen Crate & Kids in the U.S. probably on the website. And they were asking for it. This was one that kind of came to us through market demand.”
The Canadian version was launched online on January 16 and in store at the beginning of March.
Waters said the Laval store presented some operational challenges at this time and the company was not ready to launch the concept at the Quebec store just yet.
“But it’s something we’re certainly considering in the future,” she said.
