With the distressing COVID-19 events of the past few months, both the short and long term financial prospects of smaller neighbourhood shopping centre owners are looking increasingly less positive.
The fact is tenants are — or soon will be — leaving in droves.
It’s time therefore for a creative re-think.
In Canadian cities, smaller shopping centres are generally located on the fringes of established neighbourhoods and are mostly designed to service only those neighbourhoods.
The problem is the lands on which they sit will not ordinarily be redeveloped if the three main operating criteria of the typical neighbourhood shopping centre owner are maintained. These criteria are:
Do not sell
Do not take partners
All onsite development must be revenue producing
But even given these criteria the standard shopping centre leasing model could still be used to incorporate multi-family rental housing into the project.
Abstract defocused motion blurred young people walking in the shopping center.
Here’s how the model would work for an existing, typically underutilized neighbourhood shopping centre:
The existing single structure is replaced with a new building comprising ground floor retail and several floors of rental apartments and possibly underground parking for the rental apartments.
Where long-term leases are in place, the re-development would be phased and the existing retail tenants could continue to operate. Alternatively, they could be bought out and the landowner (the shopping centre owner) would take vacant possession.
The landowner retains full ownership of the land and the improvements, including both the new residential units and the ground level retail.
The main difference between the conventional shopping centre model and the model proposed here is that instead of a retail store operator as lessee, a qualified rental residential operator head-leases the residential component and pays a negotiated lease rate. The head-lessee in turn sublets the individual apartment units to individual tenants and handles all of the associated management.
The shopping centre owner deals only with the head-lessee and never with the individual rental apartment tenants.
In the case of most older shopping centres, an owner will find that its per square foot revenue from new rental housing is at least equal to its revenues from existing single or two-storey combination retail and professional office space. Likely, considerably more.
The shopping centre owner will also find that it can use the increased foot traffic (from the apartment renters) to drive up both demand for retail space and the lease rate it is able to charge retail tenants.
In many cases the building permit process for the proposed model will be far simpler than for a residential condominium project. Condominium development involves a transfer in ownership of the land. This in turn can require subdivision approval, which is a (political) decision of Council. Political decisions are typically fraught with uncertainty.
For most projects, certainly those in the Greater Toronto Area, a relatively straightforward development permit application (with site plan and minor variances) will suffice. These are administrative matters not requiring a (political) decision of Council.
Colin Hefferon
Colin Hefferon is a planning and development consultant. He is a former Ontario Municipal Board (now LPAT) Member. He can be reached at chefferon88@gmail.com.
The Canadian retail sector, like many others, has been tremendously affected by the COVID-19 pandemic. With many physical stores forced to close or adopt new ways of operating, retailers must remain adaptable. Here are six tips to boost resiliency during these challenging circumstances:
1. Give People New Ways to Get Their Goods
Many brands operating in Canada, including Preston Hardware and Home Depot, fall into the non-essential services category, meaning they cannot serve in-store guests.
However, they’ve adapted to drive retail sales in COVID-19 times. Curbside pickup and delivery are two perks some retailers offer. Some that formerly charged for delivery provide it for free to make their goods more accessible to those who want to buy them.
When assessing which services to offer, retailers should put safety at the forefront. For example, they should train delivery drivers on how to do their jobs while maintaining social distancing guidelines. They could also implement a system where a customer allows a store worker to sign for the receipt of goods on their behalf to prevent exchanging paperwork or electronic gadgets.
close up hand of young customer male paying with credit transaction by cradit card terminal in modern shop
2. Consider Offering Different Payment Options — But Don’t Stop Accepting Cash
Research indicates the COVID-19 virus can survive on some surfaces for days, causing health officials to recommend limiting physical touch. Many retailers have started urging people to pay with contactless options, such as through mobile apps.
It’s okay for retailers to explore how to reduce physical contact during the exchange of money. However, they should remain mindful that choosing to stop accepting cash causes hardships for people who don’t have other options.
The Bank of Canada recently released a statement on the matter. It featured a quote from Dr. Isaac Bogoch, an infectious disease doctor and scientist. He clarified, “We can find ways to ensure that all Canadians have access to essential goods and services, even if they are using cash. Risk can be mitigated in retail settings using a variety of methods, including ensuring access to hand hygiene for all employees.”
If cashiers wear gloves at their stations — plus have alcohol-based hand cleaner — those things can keep workers safer between the moments they wash their hands during breaks. Moreover, frequent cleaning of high-touch surfaces such as credit card readers and self-checkout screens protects customers when they choose to pay with methods other than cash.
3. Keep Customers Well-Informed About Any Operational Changes
Due to the substantial changes and restrictions affecting everyday life, some customers may assume the Canadian retail branches they usually visit have shut down. It’s imperative for businesses that are still operating to be transparent with the public and inform them about the scope of services offered.
For example, the Canadian Tire department store did that by creating a dedicated hub on its website for all COVID-19 information. It has a FAQ section, as well as regular updates from the brand’s CEO. The information covered ranges from new operating hours to the company’s recently launched pickup service. It also clarifies what happens at each location to safeguard employee health — plus the procedures they enact after a worker tests positive for the coronavirus.
Retail sales in the COVID-19 landscape are different by necessity, and customers appreciate knowing what’s new. They want assurances that retailers have taken all the appropriate precautions and are operating thoughtfully during these unprecedented times.
4. Offer an Instant Messaging Service to Streamline Communications
Clear and up-to-date communications are now more important than ever. Dedicated products exist to facilitate communication with team members via instant messaging as the coronavirus crisis unfolds. Additionally, customer-facing instant message platforms give brands a quick way to reach out to shoppers.
The pandemic means many people are re-evaluating their shopping behaviours. A survey published in mid-March by Angus Reid/Dalhousie University found 71% of Canadians were generally concerned about the coronavirus outbreak. The research also showed that, for 65% of people, the concern extended to grocery store risks. However, the poll indicated only 3% had shopped online, while 5% asked someone else to buy goods for them.
However, those numbers have likely risen in the several weeks since the survey’s publication. That’s especially likely because guidance from Canada’s leaders tells residents to stay home as much as possible. Older people are at a heightened risk for coronavirus complications, and many may need extra help while shopping online. An instant message service lets retailers reach out to any individual that has questions or worries about buying goods digitally.
When people get the assistance they need right away, the likelihood that they might get frustrated and not go through with their purchases goes down. An instant message service also enables shoppers to ask questions that could influence their purchasing decisions, such as inquiries about shipping speeds, available shipping, and stock levels.
5. Hire Professionals to Advise How to Keep Stores Safe
Since COVID-19 is a new coronavirus, it has pushed retailers into wholly new territory as they determine how to maintain safe environments for workers and shoppers. Many stores now have markings on the floors to show people where to stand as they wait in lines. Others have installed thick, clear shields between cashiers and customers.
There’s arguably a better chance of retail sales in COVID-19-affected areas remaining high if brands get trustworthy guidance about what changes to make. Walmart Canada took that approach by tasking Michael Gill to redesign more than 400 Walmart stores in Canada. Gill focuses on front-end tweaks that prevent the virus from spreading to customers and staff.
Self-checkout attendants touch screens with a stylus instead of their fingers, while guests follow bright arrows on the floor made with tape from the hardware department. Moreover, the chain temporarily ceased selling bulk food items and put tarps over the large bins that usually hold such goods.
Now is not the time for Canadian retail brands to make haphazard guesses about safety. Once customers see companies taking the coronavirus pandemic seriously, they’ll be eager to continue giving those organizations their business.
These are tough times for everyone, and many retailers are figuring out how to stay afloat despite the uncertainty. It’s crucial to show customers they’re supporting the community in whichever ways possible.
For example, Ardene is a Canadian fashion brand that donated 30,000 pairs of shoes to medical workers by the end of March and planned to give many more. Those employees need to change their shoes and socks several times a day to avoid contamination, a representative of the brand said. The company is also giving clothes to women’s shelters around the country and donating $1 from every online purchase to a youth well-being charity.
COVID-19 forced Ardene to close its physical stores temporarily. Even so, the company is making a difference and remaining relevant in these trying times. Such actions show consumers that a brand is well worth supporting.
Practical Tips for Canadian Retail and Beyond
Although all the examples here were from Canadian brands, retailers around the world can apply them to keep retail sales steady. Proactive responses make businesses better able to recover and prosper.
Kayla Matthews
Kayla Matthews is a researcher, writer and blogger covering topics related to technology, smart gadgets, the future of work and personal productivity. She is the owner and editor of ProductivityTheory.com and ProductivityBytes.com. Previously, Kayla was a senior writer at MakeUseOf and contributing freelancer to Digital Trends. Kayla’s work on smart homes and consumer tech has also been featured on Houzz, Dwell, Inman and Curbed. Additionally, her work has appeared on Quartz, PRNewswire, The Week, The Next Web, Lifehacker, Mashable, The Daily Dot, WIRED and others.
When the COVID-19 (coronavirus) pandemic eases down the road, many people are wondering what brands are most likely to survive this extremely challenging economic environment.
“I think it is a time for reflection and a time to look ahead and a time to act versus react,” said John Torella, an advisor with the J.C. Williams Group, a retail and marketing consulting firm based in Toronto. “One of the things to look at, particularly if you are a small to medium sized retailer, is how are you different, how are you unique, how are you special? Because if you’re not, you’re a commodity. You’re interchangeable and you won’t make it through this.”
“What I’m saying to clients is do a little self-reflection. Know thy self. Be very objective and subjective in terms of your real strengths. We put them through a little exercise. What is it? Is it your merchandise that’s unique? Is it the store look? Is it your service attitude? Is it the whole experience? Because once you get that starting point then you can start to build on it, differentiate it and bring it to life and give it some colour, narrative, and storytelling – all those kinds of things.”
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Torella said that based on his experience one third of the people he talks to are facing the realities, see the new realities, and are being very objective realizing it is a time for change and they’ve got to act. Another third is sitting on the fence and don’t know where to go, they’re confused without the resources or skills to respond. Another third will never change and they’re doomed. It’s unfortunate but it’s reality.
“It really depends on your mindset and that’s the hard part. The monkey brain is attacking us all the time with all the negatives and can’t do’s and what about this. And then your self has to take over and say ‘wait a minute, I’m bigger than this. I’m going to work my way through this, I’m going to build the relationships. I’m going to think short-term because I have to pay the rent next week but I’m also going to think longer term.’ Those are the ones I’m hoping will have the substance and the perseverance and the persistence,” said Torella.
He said there will be pent-up demand coming when the crisis settles down. There will be desires for experiences, getting out, socializing, and social shopping which is an important part of retail.
JOHN TORELLA
“That’s all going to come back and you’ve got to be ready for it. It may necessitate change. The change may be more in focusing maybe on the total experience of your store that it’s not just the product, it’s not just the service. It’s the whole experience. And is there an emotional connection in that experience,” said Torella.
“You know, we shop rationally but we buy emotionally. More and more retail has got to understand this need to satisfy both of those demands. We have needs but we also have wants and they’re important.”
Torella said the people benefitting from this and making the adjustments are companies like Walmart which is hiring 10,000 additional people across Canada.
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“Some people are definitely benefitting and taking advantage but they are also looking at many tactics that I think everybody should be thinking about. So whether that’s store hour adjustments or staff adjustments or free shipping or being very hyper local, very concentrated in your neighbourhood, click and collect, gift cards, all of those kinds of things should be in the toolkit,” added Torella.
Torella has been in the industry for many years and he’s never seen anything like this current situation that has hit the retail market.
“Way beyond anything I could imagine. I mean 9-11 was hard. The recession was hard. But this goes beyond that.”
The concept of click and collect for consumers was a growing trend before the COVID-19 (coronavirus) crisis hit and it’s likely to become even more popular throughout this pandemic and even beyond.
More and more consumers are discovering the convenience of shopping online and then picking up their purchases at the store at curbside.
Gary Newbury
Gary Newbury, a retail supply chain strategist and serial transformation executive, said many companies have “tinkered” with online, seeing the store itself as the channel that they communicate and sell product to customers.
“This is a golden opportunity for stores who have now had to close, because they’re now judged as non-essential, basically if they haven’t got a proposition they’ve got no revenue. So they’re faced with big rental costs and all the other operating overheads, if they can get this up and running or if they have it up and running on a meagre scale, they have to scale it up across their network quickly,” said Newbury.
John McClymont, a supply chain and operations professional, said click and collect is a bit of a branded term that started with the grocery store sector but a more generic way of referring to it is called BOPIS/BOPUS – buy online and pick up in store.
JOHN MCCLYMONT
Prior to the coronavirus outbreak, most retailers had already rolled out click and collect options, said McClymont.
“It’s an alternative to straight online shopping, utilizing inventories in the stores, so pretty much all major retailers had been doing it,” he said. “Most of them had been seeing some decent traction with it as an alternative. It’s a way to offer that online convenience but a quicker delivery / fulfillment (often aimed towards “same day” service).
“Retailers should be trying to leverage it much better than they obviously had and give it much more focus.
Some retailers don’t love the buy online pick up at store model because your customers aren’t shopping the store when you engage them this way, you lose that opportunity for an impulse buy. Keep in mind however that BOPIS is alternative to the ship to home convenience customers now look for.
“A lot of retailers have gone online because they felt they had no choice, you have to have an online presence. So I think right now it’s a great opportunity for retailers to actually show the value of click and collect. It has the potential of offering retailers the ability for a strong online presence while still leveraging their infrastructure and physical stores, that’s already in place . It’s a competitive advantage at the moment, something that Amazon doesn’t have at the same scale. They have built warehouses and fulfillment centres everywhere, and are now getting into physical retail. How many Walmart stores are there? How many Costcos? How many Toys R Us locations in Canada? Whatever it is, it gives the stores a better opportunity to reach local markets in a cost-effective way while still having that online presence.”
Newbury said the key for retailers is having a process in place in how to take care of the click and collect business. The benefit of where we are at the moment is that for many stores no one comes into the store apart from the staff. So stores could use all the space to develop a flow of executing this operation. They have an opportunity now for a month or so to refine this process for the future when the store re-opens.
AN EXAMPLE OF CLICK AND COLLECT TOWER IN CANADIAN TIRE. PHOTO: CANADIAN TIRE
AN EXAMPLE OF A CLICK AND COLLECT TOWER AT WALMART. PHOTO: WALMART
He said technology is very important as well and retailers have to make sure it is user friendly.
McClymont said the biggest issue which is a big hit to the user experience is the fact that inventory management is not done well. Much of the ecommerce benefits from the fact that they have more centralized fulfillment centres, where ecommerce orders are automatically shifted or directed to the right “ship from location” based on the “ship to address” of where the product needs to go.
“It’s a little more challenging with click and collect. If I have five or 10 stores, there’s an uncertainty as to where I am I going to pick up. Am I going to the store closest to my house, the one on my route to work, the one by my mother’s house? Which one am I going to pick? And then are you going to actually have that inventory at that store when I want it?” said McClymont.
The other thing that is a bit of a limiting factor, he said, is the business with respect to technology and communication is their inability to quickly and confidently secure that product.
“When people are online they hit buy and in their mind it’s a done deal. They have that product because the website said it was available,” added McClymont. “For click and collect, they’ll let you put the order in but then someone has to run over to the shelf and find it. If they can’t find it (even though the system said the store had inventory), the order can’t be fulfilled. There’s more in the process, and the logistics of the inventory management is creating negative perceptions of the utility of the service, as most retailers have not been able to do this as well as what’s been created for online, direct to home orders.”
Newbury said retailers have a golden opportunity to spend time working on the process and the technology to deliver a reliable service without worrying what Amazon is doing.
“Never in the history of Canadian retailers except prior to Amazon have we had this opportunity. We’ve got this opportunity a month or two depending on how Amazon rejigs its network and how long this period of confinement lasts for to actually tweak this up and get very good at this,” said Newbury.
“And the second thing is ecommerce online has always been some kind of adjunct to the mainstay of the business. The store. The store has always been the source of major revenue. Click and collect allows the stores to own the online aspect of their proposition at last. There are two big benefits of this period of time. We will never get this opportunity again. I would say to all retailers who are either relative newbies at this or haven’t even started, if you’re doing nothing else you have to focus on click and collect. You have to be relevant to your customer. You have to offer that convenience option to your customer . . . That will become more ingrained into their way of life and it will help drive loyalty for the post COVID-19 age.”
Oppsense.Digital, a digital catalyst based in Toronto, has announced a new partnership agreement with PulpoAR, a London based company that is operating in international markets including U.S., Brazil and Turkey.
This new partnership agreement between Oppsense.Digital and PulpoAR means Canadian retailers will be boosting their omnichannel strategy and integrating augmented shopping solutions, offering virtual try-on for makeup and eyewear, smart mirror and facial recognition technology along with digital signage to increase the sales conversions. Powered by AI & Deep Learning as its foundation, PulpoAR solutions transforms the retail experience. In addition, custom Augmented Reality (AR) filters for social media allows the businesses to showcase their products in engaging ways, increasing brand awareness.
PulpoAR solutions are being used by international clients that include SAP, Watsons, Rossman, Lojas Renner, Kiehls’ and Zubizu.
According to Cagdas Clark Onen, Managing Director of Oppsense.Digital, ‘70% of consumers are loyal to brands incorporating Augmented Reality as part of their shopping experience. Joining AR, AI and social media together, we provide an entirely new track, a unique experience for customers. We are uncovering value for retailers and customers. We are happy to offer this premium partnership to Canadian businesses and we are confident that it will provide tremendous value.’
According to Onur Candan, Founder of PulpoAR, “We believe that the customer journey is not linear, and has multiple different touchpoints in both digital and physical worlds. It is essential to provide a truly personalized, connected, and innovative customer journey that evokes emotion and drives them to take action. By combining Computer Vision, AR, and AI technologies, we are delivering the “try-on” experience, which is one of the biggest deficiencies in e-commerce. Thanks to our partnership with Oppsense.Digital, we are excited that we can also offer this technology to Canadian businesses.”
Zvelle: Canadian footwear brand Zvelle has set out to celebrate and honour female healthcare heroes by designing them a pair of speciality sandals and gifting them to women around the world.
The digitally-native brand has created a pair of ‘Stowe’ sandals — inspired by Canada’s first female physician and the founder of Women’s College Hospital, Emily Stowe — to recognize the immense sacrifice our healthcare professionals are making to help fight the spread of COVID-19 “We want to allow Dr. Stowe’s leadership to live on and honour the women healthcare workers who are fighting for us,” said Zvelle Founder, Elle AyoubZadeh.
IMAGE: ZVELLE
“It’s been a joy to ship out every single pair of Stowe sandals to the healthcare heroes you nominated! We were overwhelmed with nominations and are still going through them and sending out shoes as I write this! We are in the hundreds now!” said AyoubZadeh.
Nominate your healthcare hero anywhere in the world so Zvelle can send them a pair of Stowe sandals in recognition of their courageous work.
Nominations are open internationally and can be made as follows:
Share a photo of your healthcare hero on any of these social platforms: Instagram, Facebook, Twitter, LinkedIn, and tell Zvelle why you are nominating them.
PHILIPPE LEGAULT CO-OWNER OF MONDOU, ALONG WITH THE NEXT GENERATION OF FAMILY MEMBERS AND THE CEO.
Mondou: Quebec-based company Mondou is giving back to its community by donating $110,000 in products and gift cards to Moisson Montréal and to animal shelters in the wake of the COVID-19 crisis.
Through this initiative, Mondou wants to help pet owners in need, so as to prevent them from having to abandon their pet because of financial hardship during this time.
“Given the current context, it was only natural for Mondou to continue to be socially involved and to play an active role in a mutual aid movement aimed at helping those most in need,” said Martin Deschênes, Mondou’s general manager.
The family-owned company that has been caring for the well-being of animals for more than 80 years, and now is no different. In an effort to help pet owners affected by the current situation, Mondou plans to donate canned cat and dog food, as well as cat litter to Moisson Montréal. The organization will then distribute the products in several Quebec food banks. Upon completion of this initiative, 5,000 families will have benefited from this assistance.
Mondou are also giving away 2,100 gift cards valued at $30 each to a dozen partner shelters that in turn will help pet owners who cannot afford to feed their pets.
IMAGE: FLOW
Flow Alkaline Spring Water:Flow Alkaline Spring Water is responding to the recent increase in demand for water, due to COVID-19, by donating $1 million worth of Flow to frontline healthcare workers.
The Canadian brand has a goal of donating a total of $1 million worth of Flow water to frontline healthcare workers across North America during the pandemic. Flow is confident in its source, supply chain, and availability, ensuring that it has the means to support the urgent increase in water demand during COVID-19.
Flow has promised that with every alkaline water case purchased it will match and donate product to organizations that are supporting frontline healthcare workers across Canada and the United States.
Flow has partnered with Toronto hospitals Sunnybrook Hospital and SickKids Hospital to prepare issuing donations to hospitals across Canada.
Since its conception in 2015, Flow has been dedicated to supporting the environment by producing natural spring water in sustainable packaging, but now its dedication extends far beyond that as the company does its part to help the front line workers with their fight every day to beat COVID-19.
IMAGE: GOODFOOD
Goodfood: Montreal-based food delivery service Goodfood is setting out to ensure that no child or family goes hungry in the face of the COVID-19 pandemic.
IMAGE: GOODFOOD
Goodfood CEO, Jonathan Ferrari, recognizes the risk of hunger at home as schools and businesses temporarily remain shut and as a growing number of Canadian families are dealing with compromised income and , in turn, food insecurity.
As a result, Goodfood matched its members’ donations to the Breakfast Club of Canada COVID-19 Emergency Fund, up to $10,000, during the first two weeks of April. This fundraising campaign contributed over $50,000 for children and families facing hardships during these difficult times. GoodFood is also partnering with the University of Montreal Health Centre Foundation to supply medical personnel and volunteers with ready-to-eat meals during the month of April.
PHOTO: JOLLIBEE
Jollibee: Amid the countless COVID-19 closures, Jollibee has continued to provide customers with their favourite menu items via drive-through (across select locations), call and pick-up, and take-out, and now, the public can have even easier access to Jollibee’s menu through the launch of Jollibee delivery.
Available across Canada and the United States, and powered by DoorDash, Jollibee’s newest initiative kicked off in Canada on April 14.
In conjunction with the launch of nationwide delivery, Jollibee is also delivering food to those on the front lines. The brand is donating 5,000 meals to healthcare workers at hospitals across the country. Every delivery care package will include a ‘Note of Joy’ from customers nationwide to show thanks and appreciation for the hospital workers’ dedication and service during the COVID-19 pandemic.
“At Jollibee, it is part of our mission to spread joy, and during this time we want to bring it to those who need it most, our healthcare workers,” said Maribeth Dela Cruz, President JFC North America, Philippine Brands. “We’re looking forward to providing more than just a meal, but the appreciation from people all over the country for everything those on the front-lines are doing, day and night, for our communities.”
IMAGE: FRESHCO
Freshco: CEO and Founder of retail and maintenance firm Freshco, Mandy Rennehan, has launched an initiative to recognize truck drivers during the COVID-19 pandemic.
Providing truck drivers with a clean, safe rest stop in Oakville, Ontario, Rennehan and her team are offering drivers four executive washrooms which will be disinfected twice a day.
As truck drivers are finding it more and more difficult to avail of well-lit, safe, and hygienic washrooms on their routes, Freshco is providing all-inclusive washrooms, that are fully accessible, open 24/7, and lit with illumination bulbs and floodlights. Featuring hand-free soap dispensers and feminine hygiene products for women, Freshco aims to supply truck drivers en route through Oakville a pleasant and safe place to freshen up during the COVID-19 pandemic.
Located at 1151 South Service Road West, Oakville, with the main intersections being in between QEW & Forth Line, and QEW & Third line.
As politicians and industry groups are trying to find a solution, companies and drivers at the centre of this problem are looking for changes now. With Mandy’s decades of experience in building/retail maintenance and a lifetime of work as a handy-woman, she is a valuable resource to lend a hand by launching this initiative that supports these undervalued – and often under-compensated – professionals at this time.
An increasing number of foodservice enterprises and other businesses are going to contactless delivery as a way to have at least some cash flow to pay their bills during these turbulent economic times caused by the outbreak of COVID-19 (coronavirus).
Nova Pizza, which has been in business since 1963 and today has about 150 stores across Ontario, is an example of what many are doing today. It has launched contactless delivery and takeout at all their stores. A Free Delivery promotion was launched as well to keep up with recent, changing consumer demands and expectations.
Customers place their orders online and select Contactless Delivery to follow pre-payment steps. Their Delivery Expert will notify the customer once they arrive at their door, either by ringing the doorbell or buzzer, knocking on the door or via a phone call. The customer’s order will then be placed on a safe surface, on top of a delivery bag, which is placed atop an additional pizza box. The driver will then step back at least six feet away and wait for the customer to accept the order. Contactless Pick-up is also available for those that opt to pick up their own orders.
Domenic Primucci, President of Pizza Nova, said the initiative is important.
IMAGE:PIZZA NOVA
“We do have a decrease in sales, big time, drastically. So I think it’s still important to have some sales. We’ve been lucky enough that they deemed us essential service because most restaurants are closed. Because we do delivery and takeout we’re able to continue on with that portion of the business,” said Primucci. “It’s important to have that because it’s cash flow. It’s not that we’re out there making a lot of money especially with the decrease in sales.
“But it’s just to keep things going, in motion. Hopefully when we do get out of this we’re almost a step ahead if you will. It’s hard to start from nothing. The restaurants it’s going to be difficult because they’re starting from nothing. They’re going to have to re-order all the food, get the people in, maybe do some sort of training again before even one customer steps in the door. Who knows how many people are going to step in the door?
“It’s really important to help with the cash flow because bills keep coming in regardless. Okay your food bill will be less but there’s still other bills that are coming in with the fixed costs like the hydro and rent.”
David Lefebvre, Restaurants Canada Vice President, Federal and Quebec, said while dine in sales are a bigger volume it is still important for many foodservice establishments to step up their takeout and delivery options.
“Of course the losses for the dine-in sales will be tough. In a lot of cases almost impossible to replace but at least this will give them a little bit of working capital, cash flow, retaining employees, and customers don’t break the habit – they can still call to you and they still can come for the takeout (and delivery),” said Lefebvre. “So in terms of business continuing it is paramountly important.”
Lefebvre said more foodservice businesses will undertake enhanced delivery and takeout services for their establishments if they have already been doing it and some businesses who have never done it before have started to do it.
“Of course it’s not going to replace the dine-in sales. But for a few of them it will be a good opportunity to keep your head above water, let the waves pass and be able to still be standing once this is over.”
COVID-19 has pushed more consumers to shift their shopping habits online.
That has led to various businesses adopting the contactless delivery service for customers, including Article, the Vancouver-based online furniture company which delivers across North America.
AN EXAMPLE OF CONTACTLESS DELIVERY BEING EXECUTED IN CHINA. PHOTO: CBS NEWS
“The most important thing was ensuring the continuity of the business and to make sure that we were able to continue operating we had to make sure it was safe for both our employees and our customers. If we’re going to help people create beautiful spaces, it’s obviously important that we can still deliver product to them,” said Duncan Blair, director of marketing at Article.
“We see this as a really important part of keeping our team and the broader community safe. So for us it was really important to make sure that we were doing our part to minimize the spread here.”
Items are dropped off at customers’ doorsteps, allowing delivery teams to maintain a six-foot social distance.
“It’s removing all of the physical contact and proximity from the experience,” he said.
In-room assembly options won’t be available unless specifically requested in advance, in which case necessary health and safety measures will be taken.
“We are able to make exceptions on a case-by-case basis,” added Blair.
Other retailers in Canada are also implementing contactless deliveries such as Michaels Companies Inc., which operates craft stores across the country. Food retailer Nature’s Emporium recently implemented contactless shopping as well as a front-line employee wage boost of $2 per hour.
NATURE’S EMPORIUM WEBSITE
Recently, Mastercard announced it is enabling the increase of contactless payment limits across Canada, as people look for safer ways to pay in the wake of the COVID-19 (coronavirus) pandemic. The move follows similar announcements made by Mastercard recently to champion contactless limit raises around the world, as health officials recommend social distancing and a growing number of merchants encourage consumers to pay with contactless to minimize interaction.
“Mastercard is proud to have played a leadership role in driving the adoption of contactless payments in Canada and we know that Canadians have embraced it as a preferred way to pay,” said Sasha Krstic, president of Mastercard in Canada, in a news release. “With safety and social distancing top of mind for all Canadians, today’s announcement is one way we’re helping cardholders to shop easily, securely and with more peace of mind during this difficult time.”
Mastercard transactions in Canada are already tapped, said the company. With this change, this contactless adoption is expected to grow even further.
Mastercard said it is currently working with industry partners in Canada to make it easier to accept contactless payment up to $250 CAD. Once implemented by partners, this means that cardholders will be able to purchase more of what they need with the security, speed and touch-free experience of contactless payments at more merchants across Canada.
Mastercard is also reminding merchants that signatures are not required on a receipt or electronic point of sale device for contactless payments, giving consumers comfort, safety and speed at checkout.
As Canadian small businesses and retailers are in the fight for their lives, a well-known retail expert says you never go out of business for having too much cash.
Antony Karabus, CEO of HRC Retail Advisory, based in Toronto, said the number one factor that is going to separate the retailers that are successful coming out of this COVID-19 induced economic crisis from the retailers who are not successful will be their balance sheets.
“It will be the cash flow they have. The access to liquidity and what they do about managing their inventory,” said Karabus.
Antony Karabus
HRC Retail Advisory is a leading Retail Strategic Advisory firm that is focused on assisting retailers to more profitably compete in the increasingly complex and competitive digital retail environment. HRC works with retailers to redesign their organization and internal processes and tools, enable them to most profitably succeed in this time of retail transformation.
The company says its mission is to help retailers stay ahead and profitable in a rapidly changing retail environment.
“The more cash flow they have the more likely it is they can endure through the one, two, three months of no brick and mortar revenue,” said Karabus.
“There’s been reports in the U.S. of department stores that have between five and eight months of cash flow on hand. And they’re saying the guys who have eight months will probably make it through. The guys that have five months with the cash on hand or liquidity on hand are going to be touch and go.
“I think the biggest issue to come out of this is managing the balance sheet, prioritizing how you disperse cash, and making sure you’ve drawn on your own facilities. So you have the dry powder to make it through this.”
Karabus said having enough liquidity will allow retailers to get through this tough and challenging economic crisis.
“First and foremost, get access to your undrawn facilities as quickly as possible. Immediately initiate very robust 13-week cash flows so that you can forecast what your cash flow is going to be week by week. At the end of the day either the bank is going to put you out of business or your vendors are going to put you out of business when you don’t pay the bills. Because they’re not going to ship to you,” explained Karabus.
“So you want to get access to any undrawn facilities ASAP. Secondly do a very robust 13-week cash flow and update it every week.
“Number three prioritize how you disperse your cash in the most effective way on a daily basis. Get your CFO involved in that process. Not just your accounts payable clerks.”
The other issue in better managing their balance sheets is their inventory, said Karabus.
“The more seasonal your inventory is the more risky it is that if this thing goes on through the spring and well into the summer that you could have a lot of spring goods that are going to be tough to sell at anywhere near full price in the fall – because who is buying sandals in September?” he said.
“The second aspect that goes along with that, the more discretionary your product is. If you’re selling food or household stuff or board games or anything that’s considered to be an essential thing during this time and afterwards, the further you are away from essentials, i.e. the closer you are to discretionary, the more at risk you’re inventory is for markdowns and write-offs So therefore you should ensure you have an expert assess and come up with ideas for how you can best manage your inventory based on your particular circumstances over the next 120, 150 days as we are in the thick of it and afterwards.”
Karabus said the strong retailers leading up to this crisis had good balance sheets. But very few retailers have strong inventory management processes and systems.
“There’s no question this is an area of weakness in many retailers,” he said. “The way that they optimize inventory at a location basis. I think very few retailers do a good job in that area. There’s definitely significant opportunities for improvement.
“And there are not that many retailers that do a great job in those 13-week cash flows. The good retailers have access to liquidity and if you look in the U.S. some retailers like the Gap or Macy’s or Nordstrom, folks like that, on day one of this crisis they drew all the undrawn facility to make sure they had dry powder to get through this. They did it on day one literally.”
Karabus said it’s also extremely important that retailers communicate to vendors, to customers and to staff. Be transparent. Be open. Be honest. Do it regularly and show empathy.
“You want your vendors to see you as somebody who has a long-term view. You want your employees to think that and you want your customers to see that you’ll be there for them often,” he added.
STEPHAN AVENUE PEDESTRIAN MALL IN DOWNTOWN CALGARY.
Time is running out for many small business owners in the retail and food and beverage industries, especially in Alberta where they have been hit with a triple-whammy in recent years.
The first hit came when oil prices collapsed in the latter half of 2014 sending the economy into a tailspin. Almost six years later, Alberta’s economy is still struggling and feeling the negative impact of that oil price decline.
The second hit has been the increasing costs Alberta small businesses have suffered through in recent years including hikes in minimum wage, property taxes, and food costs among other things.
Many Alberta small businesses were on the brink of shutting down before because of those two factors and now the blow to the economy being brought on by the COVID-19 (coronavirus) pandemic may be the final nail in the coffin for many of them.
GRACE YAN
“It’s tough. When you add all that up, it’s a struggle already,” said Grace Yan, a commercial real estate agent with Coldwell Banker Mountain Central in Calgary. “The economy in general is in a coma. The longer this takes the less businesses will be able to come back up. These businesses just can’t keep bleeding every month.”
Realistically, how many of these small businesses will not be able to carry on?
“Well just today I believe it’s about 25 per cent that won’t come back up already. Just driving around I’ve seen so many spaces. They’ve left. They’ve just left. All the stuff in there is gone. It’s tough.”
Yan has been very aggressive in social media channels urging Prime Minister Justin Trudeau to make an order to suspend all commercial and residential mortgages, rents, utilities and taxes or “it will continue to be a disaster.”
“The current plan has been inadequate and insufficient. Action to close non-essential services then action for relief and support should happen just as fast. Leaving businesses and people to ‘figure it out’ is completely unacceptable and dysfunctional. Other countries immediately had orders for relief CUT THE RED TAPE – Get it done TODAY for the people – THAT WILL SAVE LIVES!,” is Yan’s message on her social media network.
OIL PUMPS, ALBERTA.
Yan said it’s obvious these businesses are going to need government support to survive.
“Businesses are the lifeline of the economy. Without businesses, people won’t have jobs to go to when this is over. So governments really need to support the businesses and it’s a whole domino effect,” she said. “They need to fast track the money to the businesses because the processes have been too slow. Nobody I know has even obtained this $40,000 relief (loan) even.
“And the relief that’s been given – loans and debt deferrals – that’s not adequate relief. That’s not going to really help businesses. And what’s going to help businesses relief as in true relief – grants. Federal grants with no strings attached. Because I’m hearing a lot of these businesses aren’t even qualifying for this $40,000 loan. That’s not even enough. That’s not enough to help businesses. We need to increase that number to at least $200,000. Payable in 2022. The U.S. has a far superior stimulus package compared to Canada. Far more generous. Fast processing. Businesses already have the money over there. No strings attached.”
Yan said this is what is needed right now in Canada – true relief for businesses or they will just close.
“And then what are we going to do?,” she said.
“The longer this persists there will be less businesses that survive and we need support from the government from all levels. I’ve been very, very vocal about this because it is a domino effect. We need to suspend residential and commercial mortgages, utilities, taxes. So the landlords are getting relief from the banks and they can pass that along to the tenants. Then the whole stress then is flattened because of course landlords can’t pass on relief if they’re not getting relief themselves.
“Who is going to survive this? Ontario is already saying that they’re going to extend their state of emergency for another month. Another month? The economy is on life support. These businesses can’t hang on for another month. We won’t have an economy left.”
Toronto-based Michel’s Bespoke, which specializes in custom shirts and suits, has pivoted its business because of the COVID-19 (coronavirus) pandemic and is now making and selling custom face masks to consumers.
Paul Di Palma, Chief Operating Officer of Michel’s Bespoke, said when the company had to close because of government restrictions on business it knew it wasn’t going to make sales because people wouldn’t be looking for luxury bespoke clothing at this time.
“We realized we have sewing machines and a ton of fabric. It actually started with people coming to us to ask for cotton. So we donated quite a bit at first to different people who came to us,” said Di Palma.
“And then it just kind of clicked for us that we could make masks ourselves. We had that capability here. We came up with the pattern. Came up with some ideas. Gathered all the materials because we didn’t have the elastic strings. We didn’t have the wire that we were putting in the nose piece. We took some time to get that. And then we perfected the masks that we’re pretty proud of.”
PHOTO: MICHEL’S BESPOKE
The company first opened in the early 1990s and now has two locations in Toronto. The original location is in North York on Chesswood Drive. In the beginning that store was just producing shirts but over the years it expanded the atelier and it makes suits there as well. In about 2017, it also opened a showroom at the former Thompson hotel residences on Stewart Street.
“Only the original location has the atelier where everything is made. The downtown showroom is just a showroom. People can come for fittings and appointments but nothing is made there,” said Di Palma.
Many businesses in Canada are pivoting. They have to keep some revenue stream generating some cash flow for them so they can pay for some of their fixed costs such as rent. What they’re doing is taking a close look at what they do, their resources and thinking of different ways they can utilize those resources to meet certain demands caused by the coronavirus outbreak.
PHOTO: MICHEL’S BESPOKE
For Michel’s Bespoke, making face masks was a natural fit.
