The retail landscape post-COVID-19 will be vastly different than it was before the pandemic hit, and all players in the real estate industry will have to work together to move the industry forward.
Tim Sanderson, Executive Vice-President, Retail, for commercial real estate firm JLL, states that no matter how adversarial the relationship can be between landlords and tenants at times, the bottom line is that we’re all in this together and the need to find common ground is more important than ever.
TIM SANDERSON
“Without the landlords, retailers can’t do business and vice versa. I’ve believed, for some time now, that retail is in a significant period of evolution. It will evolve in bigger and better ways because there’s a ton of smart people out there always thinking of new concepts to bring to the marketplace. I believe that will continue to be the case post COVID-19 as well,” said Sanderson.
“Nobody likes uncertainty. Thinking back to the Savings and Loan Crisis in 1987, we didn’t have the technology, the strength of financial markets, or this global economy that we do now. As terrible as that crisis and subsequent recessions were, we got through them. They had a beginning, and they most certainly had an end.”
“Governments, certainly in North America, are starting to take this a lot more seriously than they did two to three weeks ago. Measures taken until April 30 could very well extend to May 31 anytime within the next four weeks. The problem right now lies in not knowing where the end is.”
Sanderson noted that an important reality is where money will be spent by consumers once the outbreak crisis is over.
“Big-ticket items are always hurt first in recessionary times. Luxury items are hit the hardest as consumers tighten their wallets. We’re going back to shopping for essential daily needs,” said Sanderson.
Prior to the COVID-19 outbreak, Sanderson said the retail landscape within the last 18 to 24 months had been fairly robust.
“E-commerce was continuing to emerge, although it was still in the high single digits or low double digits, depending which sector of the retail economy you were talking about,” said Sanderson. “I don’t think it had deeply affected bricks and mortar retail; it was more complementary.”
In Canada, Sanderson said the country was in a fortunate position of not being “over-retailed” compared to the United States and, from that perspective, was in an enviable position with plenty of activity in the retail real estate market.
CF TORONTO EATON CENTRE. PHOTO: HOMETOWN TOURIST
Nevertheless, Sanderson said the impact of the COVID-19 pandemic is going to be huge on the retail industry.
“Liquidity in retail is a big issue, meaning how much money people have in the bank to keep their business alive. I think the sector struck the hardest is probably the food and beverage category, which was impacted early on, and is also made up to a large degree of ‘ma and pa’ retailers. The average liquidity amongst the average ‘ma and pa’ food and beverage retailers is a couple of weeks, not six months,” said Sanderson.
“What we’ve been dealing with for the last couple of weeks is what happens when rent is due. We’ve got retailers that are shut down. We waited to see what was going to happen with the malls, if different provinces across the country were going to shut them down. It’s unprecedented territory – nobody saw anything like this coming. The language that is in most leases about business interruption and force majeure is a section that people never think they’re going to have to look at. Yet, over the last two weeks, those are the clauses that are being read, re-read, and turned upside down and inside out.”
“I think we’re going to see a lot of challenges and changes for the retail industry. That said, we are already noticing significant increases in sales across grocery, drugstore, liquor stores and other essential businesses that are allowed to stay open.”
Major Canadian landlords are taking it on the chin these days with the perception that they’re not stepping up and helping out small businesses who might not be able to survive the blow being delivered by the COVID-19 (coronavirus) pandemic.
But a national association that includes building owners and managers says many landlords are indeed stepping up to help in this time of crisis.
“This is a moment of great national crisis, even as it brings out the best in Canadians. Canada’s landlords are being hit hard, but are also stepping up in a big way, and going above and beyond. We support our members which can assist tenants in this trying time, even as we recognize that our members are themselves under great strain and need to pay their own bills too. We’re very proud of our members,” said Benjamin Shinewald, President and Chief Executive Officer of BOMA Canada (Building Owners and Managers Association).
Its mission is to advance the interests of the entire commercial real estate industry through advocacy, education, research, standards, and information.
Shinewald said the federal government should step in with programs to provide relief to landlords who can then provide relief to tenants.
“Almost the entire Canadian economy occurs inside of our members’ buildings. Our industry is stepping up to do our share and then some, but we will need support to ensure that thousands upon thousands of Canadian businesses remain viable, not to mention the hundreds of thousands who live in our buildings. We need the government to help out in this critical moment,” he said.
“So far, Canadian landlords are taking the right steps to ensure that their tenants remain viable and vibrant. Tenants are our partners – we need them to succeed in order for us to succeed. I have heard of no particular crises as yet, though I suppose some are inevitable.”
Image: Vaughan MillsPHOTO: FIRST CAPITAL REIT
While major landlords might be getting a bad public image out of this for not responding, Shinewald said major landlords are leading corporate citizens right now.
“I know of several who are working quietly behind the scenes and don’t want to publicize their efforts, which is so admirable,” he said.
He cited some examples:
KingSett is opening up the Royal York Hotel in downtown Toronto to front-line healthcare workers who cannot go home and need a free place to sleep;
First Capital REIT created a $30 million program to provide rent relief to small business tenants; and
“I think that this is a moment of extraordinary goodwill. Everyone wants to help. The collective good is more important than the individual good, because there is no individual success without the collective success. My advice is for everyone to do everything they can to assist their tenant, their landlord, their neighbour, their family and themselves to get through this crisis as well as possible,” said Shinewald.
“But I don’t need to give this advice. It is happening, and it is a moment where Canada, and the Canadian commercial real estate industry, is at its finest.”
In a news release, Subway Developments 2000 Inc. said Ivanhoé Cambridge has offered their tenants much needed rent concessions to assist as they maneuver through significant sales and operational challenges due to COVID-19.
SUBWAY RESTAURANT. PHOTO: IVANHOE CAMBRIDGE
“In a letter to tenants, Roman Drohomirecki, Executive Vice President & Chief Operating Officer of Ivanhoé Cambridge has stated that they, along with its partners, will do all they can to bolster the Canadian economy during this unprecedented time of COVID-19,” said Subway.
“On behalf of over 120 Sandwich Artists who work in 10 Subway®sandwich shops located on Ivanhoé Cambridge properties across BC & AB, we would like to thank Ivanhoé Cambridge for partnering with us in this time of need,” said Simon Lileikis, President of Subway Development 2000, the master franchisor for British Columbia and Alberta.
“It’s partnerships like these, organizations stepping up and doing the right thing that will help us all come out of this crisis stronger, smarter and leaner.”
In a statement, a spokesperson for Ivanhoé Cambridge said: “As a measure to help with the COVID-19 situation, Ivanhoé Cambridge is granting a deferral of the rent payable for the month of April to certain retail tenants in its Canadian portfolio. This deferral will be granted on a case-by-case basis and for a period of time to be specified based on the evolution of the COVID-19 situation.”
With the pandemic, access to food has been a source of anxiety everywhere in the West. Panic buying by people in confinement has already demonstrated the fragility of supply chains, as supermarket shelves were emptying in many countries, including Canada. Seeing shelves fill up across the network, most consumers felt reassured. Time and time again, experts have reassured the public that food security will never be compromised, if borders remain open. The worst of the pandemic, though, is yet to come, which means that anything can still happen.
Our global supply chains are working, due to the goodwill of countries wanting to share wealth and knowledge with others. Essentially, trade is based on the principle that no one country can be good and efficient at everything. Being a Nordic country, Canada has certain disadvantages, and its relationships with other partners abroad allow our agri-food economy to fill in some gaps. We buy and sell with the world. It’s the same for other countries. Countries depend on each other. It’s a simple theory, and it’s been working for years.
But in times of crisis, such principles can easily be forgotten. Some governments react unpredictably when fear takes over and begins dictating their decisions. Since the beginning of the COVID-19 crisis, every effort has been made to ensure that trade flows as freely as possible, especially to avoid food shortages. This was the crux of the message from the United Nations and several governments around the world, including Canada and the United States.
The UN has gone so far as to say that when acting to protect the health and well-being of their citizens, countries should ensure that any trade-related measures do not disrupt the food supply chain. But the global agency also had a more provocative message in its press release this week. It mentioned that the world could face a food shortage if the authorities fail to properly manage the COVID-19 epidemic.
For now, keeping markets open without interruption has been the focus. But now that governments around the world are trying to curb the spread of COVID-19 by restricting population movements, international trade and food supply chains are beginning to show signs of slowing down. Agriculture is being affected with the thorny issue of foreign workers, and processing is being disrupted by impromptu factory closings in different places. Trucking, which ensures the connections between links of the chain, is sometimes slowed down by more road surveillance. In short, the entire supply chain is under extreme pressure.
The world is decidedly on the brink of a major slowdown in agrifood trades. Borders are becoming more fragile as we get closer to the peak of this pandemic. The United Nations appropriately called the world to order, which is especially important now. Uncertainty about the availability of food can literally trigger a wave of export restrictions, creating a shortage on world markets. Such a scenario is highly improbable, but not impossible.
For us, the United States is the wild card. The number of positive COVID-19 cases in the US is alarming, as are the number of deaths. What’s adding more pressure is the 10 million Americans who have lost their jobs in the past two weeks. 10 million, in two weeks. Considering the size of our own economy, the situation in Canada is slightly worse. These are unprecedented numbers. These numbers are very, very alarming.
And unfortunately, we all know how fear can influence governments, especially in the US. You only need look at the wall erected on the American-Mexican border. According to a recent survey by Angus Reid, a total of 71% of Canadians are either concerned or extremely concerned about the Canadian economy. When a crisis hits, populations tend to stay close to what’s familiar, which is why the buying local movement is getting a little bit of a lift these days. In fact, according to the same survey, 43% of Canadians intend to buy locally once the crisis is over. It’s always nice to buy local and support our own economy, but we all need to think about the big picture. More than 60% of the Canadian economy stems from exports.
Things are already getting complicated across the planet. Russia has issued a government decree establishing an export quota for certain grains until the end of June as its virus cases escalate. The correlation between the number of COVID-19 cases identified and the nervousness of governments is strong. Let’s hope cooler heads prevail in North America.
As ‘non-essential’ retailers have been forced to close across the country for an unspecified time, it is now vital for small main street businesses to cultivate an online presence. Prior to COVID-19, ecommerce was taking the retail world by storm. However, until now, building a digital network was merely good business advice. Today, it may be the difference between the life and death of a main street business.
The current economic state in Canada is severely cracked. COVID-19 has ignited a wave of unprecedented temporary store closures, and across the retail landscape this could mean potential ruin for many small Canadian businesses.
Being forced to close your doors without any guarantee as to when you will be able to reopen is major for any small business with a lower cash flow, and the questions of what to do with left-behind stock and how to keep up with rent payments are at the forefront of all small business owners minds.
YORKVILLE AREA OF TORONTO. PHOTO: CRAIG PATTERSON
Since its establishment in 2016, many main street businesses have turned to Toronto-based Digital Main Street for assistance in the digital realm of their retail organization. Having created a tried-and-tested program that promotes digital growth for main street businesses, Digital Main Street has catapulted thousands of main street businesses into a digital transformation, via the introduction of digital tools and technologies.
Digital Main Street was created by the Toronto Association of Business Improvement Areas (TABIA), in partnership and with direct support from the City of Toronto. The organization is also supported by a group of strategic partners, including Google, MasterCard, Microsoft, and Shopify.
During this unprecedented and turbulent time, and as COVID-19 threatens to ruin the businesses that contribute to our local communities, TABIA and Digital Main Street are wholly committed to continuing their involvement in main street business development and fulfillment. Now, more than ever, the adoption and implementation of digital tools and technology is indispensable.
EGLINTON AVENUE WEST. PHOTO: THE EGLINTON WAY BIA
Moving forward, DMS have taken keen measures to ensure that, despite the uncertainty, main street enterprises still have access to assistance and guidance. Having adapted its services to ensure the health and safety of employees and business owners, Digital Main Street is still able to provide the same level of care and still exists as a hub for digital transformation guidance. Businesses are encouraged to access the free online Digital Transformation Training Program to help with any digital inquiries.
DMS has implemented some key procedures to ensure that all involved are protected during the uncertainty, all while continuing to provide the same access to resources and support. While enacting a work-from-home policy for all employees, Digital Main Street is still offering workshops and one-on-one training. The only difference is that now the support is conducted virtually. The team has put together various resources to help businesses navigate this crisis.
The Digital Service Squad —once an interactive, hands-on training service — will be continuing to service businesses remotely in active areas. If you have any questions about booking an appointment with the Digital Service Squad or to check if there is a DSS servicing your region please email info@digitalmainstreet.ca.
QUEEN ST WEST, TORONTO. PHOTO: CRAIG PATTERSON
Digital Main Street was introduced in Toronto four years ago due to a recognized gap in the marketplace. Businesses needed the tools and technology to adapt and grow to today’s omnichannel world of retail, but without the knowledge and resources, the concept of introducing ecommerce to their business model was often beyond comprehension.
“Digital Main Street shows the ingenuity of Toronto’s digital and technology business community to create essential tools and services of benefit to all main street businesses,” said John Kiru, Executive Director of TABIA. “Toronto’s BIAs have been a leader worldwide in the development of private and public sector partnerships, and this project builds upon that tradition of innovation and collaboration.”
The program is built around an online learning platform, structured training programs (both in person and online), and the Digital Service Squad – a team of recent graduates who help business owners activate and implement new Digital tools and technologies.
With a foundational and hands-on approach to educating, empowering, and implementing, Digital Main Street operates under a model that allows business owners to execute and activate digital tools and technologies, often in real time and with the active assistance of the DMS team. This interactive method promotes continued learning long after the DMS team have left the store.
To achieve this, Digital Main Street recognized the need for a complete 360-degree support program. Included in this all-encompassing tool are three foundational pillars, all of which are designed to “drag your business into the 21st Century.”
Web Platform
This comprehensive online web platform provides access to curated content, thought leadership, skill training, and much more. In addition, a complete directory of local vendors is available, providing recommendations when a business is looking to complete a project. At the core of this web platform is the Digital Assessment too. Giving participating businesses the opportunity to take a 40 question “Yes/No” questionnaire to provide a benchmark and appropriate set of recommendations to consider based on their answers.
Digital Main Street Academy
The Digital Main Street Academy is a complete collection of in-person and online training sessions. The academy features numerous online education programs, an example being the online video based “Digital Transformation for Main Street business” course that was launched in late 2018.
Digital Service Squad
Lastly, to ensure businesses have the complete 360 support, the Digital Service Squad was established. Providing businesses with one-on-one, hands-on support, the Digital Service Squad allows business owners to work with a trained team of students and recent graduates. This team of street-level DMS members go directly into main street businesses to work alongside the owner and/or staff to guide them as they begin to execute their Digital Transformation.
Despite the initial project only including businesses across Toronto’s 83 BIAs, it soon became apparent that the foundational elements of DMS are applicable to small businesses in communities all across North America. Today Digital Main Street is active in 400 cities/communities across Ontario, and it has big plans to grow across the country and into the US.
As we face an equivocal future, Digital Main Street is dedicated to supporting the businesses that create vibrant neighbourhoods and maintain a high quality of life for the surrounding communities. The team is urging main street businesses to avail of its services, especially now, during a time where digital presence has never been more vital.
Darryl Julott, Senior Manager at Digital Main Street, addressed the DMS community by saying, “As we grapple with the unprecedented scale and human impact of this pandemic, our community continues to support and learn from each other. I invite you to reach out and connect with us – you can share any questions you may have regarding to your digital presence, or otherwise. The Digital Main Street team is here to listen and support.”
To learn more about Digital Main Street and how your business can evolve in a digital world visit digitalmainstreet.ca.
A Halifax-based website that has been keeping consumers abreast of all the retail happenings for the past eight years has launched an initiative to help small businesses through this tough economic challenge resulting from the COVID-19 (coronavirus) pandemic.
Halifax ReTales, a tracker of the goings on in the Halifax Regional Municipality retail and restaurant scene, is asking consumers to invest in their establishments and stores by buying gift cards for future use.
“Our small businesses need us more than ever. It’s basically a mini-loan, so buy one now and make a plan to use it later,” says the website.
Arthur Gaudreau, who is behind the website, said when the coronavirus broke out ReTales started gathering a list of what was open and what was closed. The information was crowd sourced, he built a spreadsheet and from there it was posted on the website.
EMPTY HALIFAX STREETS. PHOTO: THE CHRONICLE HERALD
“So people would know what was open or closed. Were their favourite restaurants open or were they closed? Were they offering takeout, were they offering delivery? Could you go in? When I started it people could still sit down. The day after I put up the list that all changed and all the bars had to close. No longer were we allowed to sit in restaurants,” said Gaudreau.
“I created a secondary site to focus on our local companies where people could just click on the links of the logos of their favourite companies and it would take them to the site where they could buy a gift card for those companies. I focused on the local companies in that situation. I wasn’t going to tell someone how to buy a Walmart gift card online or anything like that.
“The focus on that was basically you could invest in some of your favourite companies for when they come back online and you’ve already given them a micro-loan in the meantime.”
Gaudreau said entrepreneurs’ livelihoods are now at stake.
“What I’m really worried about is what’s going to happen when all this is done. So many companies are already on the edge. What is this going to do? Even with the gift cards, I’m encouraging people to buy gift cards but it’s almost like gambling because what if they don’t come back,” he said.
“I want people to support these companies but at the same time we’re all in a situation where our work has gone weird. Where’s your income coming from?”
Gaudreau said information is important for people particularly in these challenging, and ever-changing times.
“That’s what I want to get out there. Everything I do and talk about in my blog is based on these people and the service industry and the retail industry which so immediately got decimated by this. I had to give something back. I had to do something to help in some manner. I’m not rich in any manner. I can’t float them. But at the same time I had to do something and I knew that I could do something quick and I have the right audience to help me get that information quickly and then disseminate back to everyone,” explained Gaudreau.
While retail is becoming homogenized globally, there are still plenty of regional differences pointing to the fact that physical retail is in many ways a localized phenomenon.
Retail Insider’s Lee Rivett visited Johannesburg, South Africa, in January 2020 touring two of the country’s leading shopping centres. Both are impressive and one skews heavily towards housing luxury brand stores, despite recent economic and social challenges in the country (pre COVID-19).
While luxury stores have typically located on streets in Canadian cities such as Bloor Street West and Yorkville Avenue in Toronto and in the Alberni Street ‘Luxury Zone’ in Vancouver, much of the high-end retail in Johannesburg is located in one major shopping centre. And another major shopping centre is home to major ‘mainstream’ brands that can be found in cities globally.
In Johannesburg, despite the exceptional weather, much of the ‘better’ shopping options are found in fortified shopping centre properties. That’s due to perceived safety issues that include elevated levels of crime stemming from social issues that some say stem from a history of segregation. As a result, upscale and major-brand shopping in South Africa’s largest city can be found in shopping centre properties that offer a high-security environment that consumers deem ‘safe’.
The following is an overview that includes background information on South Africa along with a comparison of Canada, followed by a discussion of the top two shopping centre properties in Johannesburg. Photos were taken by Mr. Rivett during his two-week visit to South Africa in January 2020.
Introduction to South Africa
South Africa is officially known as the “Republic of South Africa” and is located on the southern point of the African continent. Last year, its population was 58,775,022 according to the Department of Statistics South Africa. The largest city in the country is Johannesburg, which is also known as the “Cradle of Humankind” — its history is said to go back 3.5 million years after the discovery of hominin fossils in the area.
PHOTO: LEE RIVETTPHOTO: LEE RIVETTPHOTO: LEE RIVETTPHOTO: LEE RIVETT
Canada: As a high-tech industrial society in the trillion-dollar class, Canada resembles the US in its market-oriented economic system, pattern of production, and affluent living standards.
South Africa: A middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors and a stock exchange that is the 15th largest in the world.
Canada Stats
Population: 37,108,000
GDP: US $1,726,601 million
GDP per capita: US $47,000
Customer spending growth: 2.17%
Customer spending per Capita: US $27,000
Retail price Inflation: 1.33%
Unemployment rate: 5.9% -2018 figures from CBRE
South Africa Stats
Population: 57,726,000
GDP: US $375,751 million
GDP per capita: US $7,000
Customer spending growth: 1.62%
Customer spending per Capita: US $4,000
Retail price Inflation: 4.62%
Unemployment rate: 27.2% -2018 figures from CBRE
Johannesburg Skyline. Photo: InYourPocket
The City of Johannesburg is located within the Gauteng province. South Africa is similar to Canada with the country being divided into provinces. Although Gauteng occupies only 1.5% of the country’s land area, it is the financial hub of South Africa and real annual economic growth rates for 2016 indicate a growth of 1.4% for the province — that’s according to CBRE.
Gauteng is also the country’s retail hub with over 10.8 million square metres of retail space. That’s substantially more than the Western Cape province (3.5 million square metres), KwaZulu-Natal province (3.3 million square metres) and the Free State province (870,000 square metres), combined.
The largest shopping area in Johannesburg is the Sandton Retail Node (spanning 170,939 square metres), which consists of a combination of Sandton City (141,390 square metres), Nelson Mandela Square (16,265 square metres), Legacy Corner (7,000 square metres) and Michelangelo Towers Mall (6,284 square metres).
Pretoria, a city approximately 55 km north of Johannesburg, is home to the recently renovated Menlyn Park Shopping Centre (spanning 177,000 square metres) and others.
Business Tech
Sandton City is a shopping mall situated in the Sandton area of Johannesburg. The centre opened on September 12, 1973. The centre includes an adjacent hotel and office space. Sandton City is near Nelson Mandela Square and Michelangelo Towers Mall (spanning 6,284 square metres).
SANDTON CITY ENTRANCE. PHOTO: INYOURPOCKETSANDTON CITY NODE/COMPLEX. PHOTO: INYOURPOCKETSANDTON CITY INTERIOR. PHOTO: GAUTENG TOURISM
Sandton City’s interior is impressive, featuring an upscale design and retail offering surpassing that of most of Canada’s leading shopping centres. Its main retailers/anchors are Woolworths, Edgars, Zara, H&M and Cotton On and its consumer profile is middle-upper income customers.
Michelangelo Towers Mall Entrance. Photo: Lee Rivett
MICHELANGELO TOWERS MALL ENTRANCE (EXTERIOR). PHOTO: LEE RIVETTMICHELANGELO TOWERS MALL INTERIOR: LEE RIVETT
Nelson Mandela Square. Photo: Lee Rivett
The six meter high statue of Nelson Mandela in the photo above was unveiled in 2004 as the square was renamed from Sandton Square to Nelson Mandela Square. For a little more history on the centre, Sandton City opened in 1973 and initially spanned 538,195 square feet.
The story of Sandton City stretches back to rural beginnings as the land was bought for R4 million over a period of two years from June 1967 to April 1969 at an average of R40 million per acre. Developers Natie Maister and David Rapp later incorporated it into Liberty Properties.
32 hectares of land acquired to develop Sandton City. Photo: Property24Developers Natie Maister and David Rapp from Rapp & Maister study the building plans. Photo: Property241969 renderings. Photo: Property24
The centre has undergone two major expansions (in 2011 and 2015) bringing the total size to over 1.5 million square feet. Sandton City claims to hold the reputation of being “Africa’s most iconic shopping centre’. Sandton City is currently managed by JHI Retail and owned by Liberty Group Limited, Liberty Two Degrees Limited and Pareto Limited.
Information Desk in Sandton City. Photo: Lee Rivett
Similar to leading Canadian shopping centres, Sandton City has several tiers of retailers as well as services. That includes an impressive roster of luxury retailers. The chandelier draped Diamond Walk (photo tour below) luxury hall included numerous standalone luxury staples like Louis Vuitton, Cartier, Dior, Burberry, and Prada and has since expanded to almost every retail segment. The range includes timepieces retailers such as Breitling, Panerai, TAG Heuer and Patek Philippe, to fashion retailers such as Hugo Boss, Burberry, Jimmy Choo, Giorgio Armani, Off-White, and Zegna. Some other well-known yet elusive luxury brands were resident including Ferrari, Emporio Armani, Dolce & Gabbana, Longchamp, Montblanc, Pau & Shark, Ferragamo, Tod’s, Versace, and others.
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Diamond Walk (Luxury Hall) in Sandton City. Photos: Lee Rivett
The roster of brands give Canada’s most productive mall, Yorkdale Shopping Centre in Toronto, a run for its money. One thing to note is that Sandton City lacks large-format multi-brand luxury stores such as Holt Renfrew, hence the direct-to-consumer trend is alive and well amongst high-end retailers in South Africa.
Amongst the other wings of Sandton city include a variety of value and mid-range retailers as well including Superdry South Africa (clothing), Lacoste, Superga Footwear, Sketchers, Foschini, Old Khaki, True Religion Jeans, and Mr. Price Sport.
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Value and Mid-Range Retailers at Sandton City in Johannesburg, South Africa. Photos: Lee Rivett.
Photo: Lee RivettGRAYS MENSWEAR FASHION. PHOTO: LEE RIVETTPHOTO: LEE RIVETT
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Value and Mid-Range Retailers at Sandton City in Johannesburg, South Africa. Photos: Lee Rivett.
The centre is also home to a range of mid-priced and aspirational retailers. Some names will be unfamiliar to most Canadians. Some of the more recognizable names include: Aldo, Adidas, Armani Exchange, Calvin Klein Jeans, Coach, Cole Haan, Krispy Kreme, Daniel Wellington, J. Crew, Juicy Couture, H&M, Hamley’s, G-Star, Guess, Fossil, L’Occitane, Lego, Levi’s, Lush, MAC, McDonald’s, Mango, Michael Kors, Nike, NYX, Pandora, Samsung, Scotch & Soda, Ted Baker, Body Shop, Under Armour, Timberland, Tommy Hilfiger, and Zara.
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Value and Mid-Range Retailers at Sandton City in Johannesburg, South Africa. Photos: Lee Rivett.
Sandton City fills out its repertoire with specialty retailers including Hamleys Toy Shop which had a slide from the second floor for children to spiral into the main floor retail area. Other children retailers at the centre included Cotton On Kids, Earthchild, Guess Kids, Keedo, Naartjie, Okaïdi and X-Kids.
The Sandton City node is a multiple award-winning shopping centre and home to over 300 of the world’s most in-demand brands. From an eco-fashionable Food District, a family-focussed Fun District, to a chandelier draped Diamond Walk which is home to many global luxury brands.
Retail Insider’s visit to the shopping centre was memorable for the volume of patrons browsing the stores, whether it be locals and tourists alike. Watch for our second part of our South Africa retail tour where Retail Insider visits Menlyn Park Shopping Centre and we take a look at the national retail chains at a high level.
PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK. PHOTO: PEREGRINE
As ‘essential’ businesses remain open across Canada amid COVID-19, the risk that cashiers and service workers could become infected by customers while at work is high. Vancouver-based Peregrine, known for its fabricated fixtures and millwork, has pivoted its production to create plexiglass screens to protect front-line workers. Peregrine is looking to connect with businesses to supply these at an unprecedented time.
The Vancouver-based company’s self-standing plexiglass barriers are said to help create a strong partition between staff and the hoards of customers still flocking to available retail destinations. Designed with banks, pharmacies, retail stores, gas stations, hospitals and clinics, and government agencies in mind, Peregrine’s easy-to-install plexiglass barriers are available to all businesses across the country.
Currently the company is producing about 400 barriers a day for banks, pharmacies, and liquor stores, while also getting increasingly more requests from gas stations and hotels.
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PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK. PHOTOS: PEREGRINE
PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK
PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK. PHOTOS: PEREGRINE
PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK
PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK. PHOTOS: PEREGRINE
PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK
PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK. PHOTOS: PEREGRINE
PEREGRINE PLEXIGLASS BARRIERS IN USE AT SCOTIABANK
Designed for straight-forward installation, cleaning, and removal (if we ever see the day), the barriers are approximately 28” wide x 32” high and 3” deep in dimension. In terms of pricing, the Peregrine plexishields are $225 per shield, with discounted pricing for orders over 50 units. Currently a five unit minimum order is in place. For more details visit Peregrine’s brochure.
If you are in Vancouver’s lower mainland, Peregrine will deliver supplies to your business. Otherwise, they are available for shipping anywhere within Canada.
PROTOTYPES OF THE SCREENING BOOTH. PHOTOS: PEREGRINE
EXAMPLE OF TREATMENT BOX. PHOTO: PEREGRINE
In addition to the retail plexishield innovative, Peregrine are currently working on two other prototypes that will hopefully be ready for purchase and distribution within the coming weeks.
The first being a ‘treatment box’ designed to protect health care professionals while they treat infected patients. This plexiglass ‘treatment box’ will be manufactured to sit comfortably over the patient’s face, with two holes designed for the health care professional’s hands to slot through and work accordingly. This should help limit the airborne spread of COVID-19 from patient to doctor.
The second prototype is a screening booth. Designed for use at any type of in-take facility, it limits the level of contact between worker and patient as the booth is enclosed from three sides. This initiative was originally designed by global creative agency ASTOUND and Peregrine hopes to create its own, all in a bid to increase the volume available to health care practitioners.
Brian French, President at Peregrine, hopes to roll these initiates out as soon as the design is perfected and the supply of plexiglass allows for mass distribution.
Peregrine has been operating out of Vancouver’s lower mainland for over 38 years. It is the largest manufacturer of custom, high-end retail environments in Western Canada. Serving clients primarily in the retail and banking industries, Peregrine has worked with leading brands, including Saje, Lululemon, Kit and Ace, Aritzia, BMO, Vancity, and MEC. With a keen ability to create quality branded environments that invite interaction and intrigue while delivering value to a business, Peregrine often finds itself at the forefront of retail design as innovation in Canada grows and consumer habits shift.
To learn more or to order plexiglass shields click here.
AN EMPTY YONGE ST, TORONTO. PHOTO: CRAIG PATTERSON
A grassroots coalition of small businesses across Canada, united in its opposition to a debt-forward solution to the COVID-19 economic crisis, has issued a dire warning about the state of those businesses as they face paying rent on April 1.
A recent survey by SaveSmallBusiness.ca found that 75.7 percent of small businesses report a drop of 80 to 100 per cent in revenue and another 11.2 percent report a decline of 60 to 80 percent.
The survey found that 37.9 percent will not be able to pay April rent, while an additional 32 percent will be able to make April, but not May. Therefore 69.9 percent of respondents will be in default of their tenancies by May 1.
The organization’s website was started on March 22 by seven small businesses from different sectors: The Discourse, Social Capital Partners, Impact Bridge, Dageraad Brewing, Sun Peaks Independent News, Tangent Cafe, and Iskwew Air. Less than 24 hours later, more than 2,500 small businesses had joined this movement.
SMALL BUSINESSES ALONG EGLINTON AVENUE WEST, TORONTO. PHOTO: JESSICA FINCH
The website is managed by The Discourse, a digital news media company in Vancouver.
Jon Shell, Managing Director & Partner of Social Capital Partners in Toronto, and co-founder of the movement, said recent announcements by the federal government to support small business have received significant praise.
Increases to wage subsidies, more generous loans, and deferral of sales tax collection will all help many companies. But local small businesses – “main street” businesses – will likely not benefit from these supports. These businesses, forced in many cases to close in order to protect their communities from the COVID-19 public health crisis, have largely laid off their staff. They have also expressed limited interest in taking on additional debt, on any terms, as indicated by the almost 22,000 businesses who have signed a petition at savesmallbusiness.ca.
“We’ve been advocating for a program that would cover some of the fixed costs of main street businesses or they’re all just going to shut,” said Shell.
SPADINA AVENUE NEAR COLLEGE STREET IS HOME TO NUMEROUS SMALL BUSINESSES, INCLUDING A NOTABLE MUSIC STORE. PHOTO: CRAIG PATTERSON
“The solution the government has right now is this loan program but people just can’t sign loan agreements. A lot of them English is a second language, they’re not financially sophisticated, they’re barely getting by as it is, their lawyers and accountants are not available. And then we’re asking banks who can’t even handle mortgage deferments, how big is their back log, to roll this thing out in time to save small business.
“Our proposal is a landlord-friendly proposal. We put a proposal that doesn’t require legislation where the federal government can pay money directly to landlords to fund a portion of rent during the next three months. It allows the landlords a framework to work with their tenants to get through this. They don’t get all their money but they get a lot of it.”
The organization recommends the following:
That the federal government directly provides aid to commercial landlords in order to provide a financial incentive for them to voluntarily reduce or waive rent for their tenants;
That provinces be encouraged to put a moratorium on commercial lease lockouts, preventing landlords from locking out tenants on April 1 while the implementation of this strategy is developed;
That all levels of governments put significant public pressure on banks to defer property debt principal payments without accruing interest;
That the federal government works with provinces and municipalities to agree on a property tax and utilities abatement strategy for April, May and June; and
That the federal government announces the framework of a rent abatement strategy prior to April 1 in order to avoid significant confusion and mass lock-outs of businesses on that date.
A QUIET INTERSECTION AT QUEEN ST AND JOHN ST, TORONTO. PHOTO: CRAIG PATTERSON
According to the organization, small businesses generate more than a third of Canada’s GDP.
“Across the country, many of our small businesses have closed their doors, and many more will follow in the coming months. We’ve seen dramatic drops in sales and disruptions to our supply chains as a result of the measures we’re all taking to stop COVID-19,” says the group on its website.
“We’ve paused our businesses to protect our communities’ health. Government needs to help us pause our expenses so we’re still in business when it’s time to restart the economy. The answer isn’t more access to debt. We shouldn’t have to mortgage our future to pay for our collective response to this virus. We’re willing to pay our share, but we need banks, landlords and the government to equitably share the burden. We’ll lose thousands of small businesses if measures aren’t taken.”
If major Canadian landlords continue to take a hard line on rent relief for retail tenants, they run the risk that “there will be tumbleweeds blowing through that mall three months, six months from now,” says Karl Littler, Senior Vice President, Public Affairs at the Retail Council of Canada.
There continues to be growing debate and controversy throughout Canada about major landlords who have not “stepped up” to help retail tenants in a meaningful way survive the growing economic crisis caused by the COVID-19 pandemic.
“Landlords are not in an expressly strong economic position. They may be in a strong strictly legal position but their economic position is pretty weak because in a very, very large swath of retail they have people that are not active in their bricks and mortar which is the asset that is provided by the landlord. They are not going to force everybody into insolvency. They’re going to sit if people ask for it and negotiate. Sure, they’re going to want it to be a deferral and they’re going to want it to be as short as possible but their ability to really do much to force the payment of rent in these circumstances is limited,” said Littler.
“Economically they have an interest in the survivability of all or most of their tenants. Let’s be clear. Some landlords are cutting deals, making deferral arrangements. They tend not to advertise it. But they are doing so. I think most landlords are sane enough to realize that if you kill off your future income source that’s probably not a wise long-term economic decision.”
An executive for a well-known Canadian retail chain said the public relations staff for several major Canadian landlords should be fired for allowing the landlords to handle this crisis the way they have so far.
The executive said those major landlords are well-funded through pension funds for example, and while many retailers closed their doors initially, shopping centres did not.
“You would think they would be stepping up and trying to keep their tenancy as healthy financially as possible and certainly a rent deferral does nothing. Look, if I have zero revenue in a location and I have rent whether I pay that rent now or by year end is irrelevant. I still have zero revenue for two months. It’s a help in the short term for cash flow but it really does nothing,” said the executive.
“At the end of the day the retailer is taking it on the chin and retailers have stepped up. So many of them committed to paying their associates for a period of time. We’re reaching the end of that time now and you’re starting to see layoffs. But where’s the landlord version of stepping up?”
PHOTO: FIRST CAPITAL REALTY
A quarter of Canadian small businesses cannot pay their April rent/mortgage due to the COVID-19 pandemic, according to the Canadian Federation of Independent Business. The organization released results of its latest survey on Monday showing that hospitality is particularly hard hit with 44 per cent saying they cannot meet their rent obligations. Other sectors hard hit include arts, recreation & information (40 per cent), and personal services (32 per cent).
The survey also found:
Only one in five businesses now report being fully open (down from one in three last week);
86 per cent of small businesses believe government should make emergency money available to businesses that have been hard hit by COVID-19 to cover their fixed costs; and
42 per cent of business owners are worried about having to close their business permanently.
AN EMPTY CF TORONTO EATON CENTRE. PHOTO: TORONTO TOURISM
The CFIB is asking that the provinces move to protect commercial tenants from being evicted during the COVID crisis. That would be some temporary protection in cases where the landlord is not being reasonable.
CFIB has three main recommendations for governments:
Provincial governments should provide substantial commercial property tax relief for the duration of the crisis (at least 25 per cent reduction in annual total property tax bill);
The federal government should ensure that $10,000 of its Canada Emergency Business Account is forgivable to cover rent and other fixed costs and that eligibility criteria are such that businesses hardest hit and most at risk of closing permanently will have access to the money. The money should be made available as quickly as possible; and
Provincial governments should create a hardship fund with additional emergency money for businesses with significant revenue losses, significant cost increases and/or who are at risk of permanent closure due to COVID-19 (up to $5,000 per month for 3 months) to help small businesses pay rent and offset other fixed costs. Priority should be given to businesses that were forced to close and those not covered by federal programs.
John Wolf, a Senior Partner at Blaney McMurtry LLP, said most landlords are open to the idea of providing material rental deferral assistance to tenants to help them through this process.
“I am working around the clock assisting parties with these matters. What I’m trying to do is help clients to determine whether or not they wish to take what I think is a sort of more mature long-term view of these situations and not to act expeditiously,” said Wolf.
“What I’m suggesting to landlord clients is that they act reasonably with tenants understanding that the typical rules of rent relief are going to be difficult to apply because the typical rules of rent relief, and every landlord has a protocol for it, they usually involve an application process, and involve the disclosure of a series of business records and other information that is looking backward not looking forward. Prudent landlords are going to judge each case on an individual fact by fact basis and they’re going to determine what level of help does a tenant really need and does the landlord wish to provide that help.”
Wolf has a unique practice. He’s one of a handful of lawyers that does nothing but operational lease enforcement work for both landlords and tenants.
“I have never seen a situation such as this where landlords probably have more rights with less opportunity to actually use the rights,” he said. “It’s a right without any current remedy. Landlords don’t have a lot of mass enforcement options.”
He said a one-size fits all solution is the wrong way to approach this issue.
“Tenants want unconditional forgiveness of rent. Of course landlords don’t want that. They want deferral with interest. In between is going to be the dance around to get to a deal. Who’s going to give what up? Those sorts of negotiations are going to take a long time.”
Wolf said over the next one to six years there’s going to be a number of judicial decisions that will consider concepts in leases and refine them in the context of a pandemic.
PHOTO: BLANEY MCMURTRY LINKEDIN
Grace Yan, Director of Sales and Marketing, Recruitment for Coldwell Banker Commercial, said she’s spoken with some commercial tenants where the landlord has indicated that while they figure out the relief the rent is still payable.
“There are some commercial tenants that have been offered deferred rent. Overall the big landlord responses vary and are based on a case by case basis. The whole process has been frustrating for all parties involved and unless there is a direct order from Prime Minister Trudeau that all commercial and residential mortgages, rents, utilities and taxes be suspended it will continue to be a disaster. The current plan is inadequate and insufficient.” she said.
Yan said one of her clients is a medical doctor with 15 clinics in Calgary who has been attempting to renegotiate a lease with a major real estate landlord as ratios are not working and a struggle for most tenants.
“While in the middle of negotiating he was 10 days late for the rent – (the landlord) immediately terminated the lease and ordered he remove his belongings in five days. He attempted to remove his belongings and found out they changed the locks. In a time of crisis and global pandemic this is not how we treat people and furthermore medical professionals that we need in this crucial time,” said Yan.
AN EMPTY MALL IN MONTREAL LAST MONTH. PHOTO: THE CANADIAN PRESS
Michael Kehoe, a Lead Ambassador with the International Council of Shopping Centers and broker/owner of Fairfield Commercial Real Estate in Calgary, said current economic conditions have stores and restaurants closed with little or no income.
“The situation is very fluid right now as landlords and tenants alike grapple with the new financial realities. The situation progressively will return to that new normal over time, but retail and food service tenants will need cooperation from their landlords. The weeks could turn into months for people to feel comfortable venturing out for non-essential shopping and restaurant dining. There will likely be an extended ramp-up period after that for any kind of normalcy to set in, with consumers spending freely and away from survival mode,” he said.
“It will be important for retail and food service tenants to be cash flowing in a positive manner with the full ability to pay contracted rents as soon as possible. Proactive landlords and tenants have the communication channels open with each other discussing such options as immediate fixed period unconditional gross or basic rent deferrals with extension of such provisions if needed and lease re-negotiation when and if required. Kick the can down the road, read your lease, talk to your lawyer and hope a clear path forward will emerge.
“It is abundantly clear that landlords need to be compassionate with their retail and food service tenants and the tenants need to be compassionate with their employees. For consumer real estate landlords, I liken it to the Mother Teresa approach versus the General George S. Patton approach where in these uncertain and unprecedented times the legal may be different from the practical when it comes to lease enforcement and tenant relations. Tenant retention is everything right now. The much-coveted shoppers and dining patrons will be watching and will vote with their feet and their wallets. Everyone in the consumer real estate chain should be channeling their inner Mother Teresa right now.”
retail design firm peregrine are manufacturing plexiglass shields for essential businesses. image: peregrine
By Brent McKnight and Martina Linnenluecke
The global coronavirus pandemic is causing unprecedented disruption around the world. Efforts to contain the virus have shut down or hampered many businesses. Across the world, business owners, operators and employees face job losses and imminent economic impacts.
Our intention here is to bring a glimmer of hope to those who find the current situation frightening. We highlight some of the incredible creativity, ingenuity and resilience that we see around the globe. Businesses are finding ways to continue operating while supporting the fight against the pandemic. This provides hope for recovery but also points to the potential for more permanent change as we emerge from the current crisis.
Different Times
The current coronavirus pandemic differs markedly from the types of disasters that businesses and communities have historically experienced.
More common disasters such as hurricanes, floods or wildfires strike fast and hard in a tight geographic area. These disruptions are short-lived and geographically limited. Our research shows that businesses contribute to community resilience in the aftermath of these disasters. They help to rebuild, make donations, maintain their business operations and deliver critical products and services.
The current crisis disrupts the ability of many individuals and businesses to physically connect. Particularly challenging is that the length of the disruption is highly uncertain and without an immediate resolution. But we are noticing that these same characteristics are also driving firms to rise up to meet this challenge.
Businesses, including restaurants, are finding different ways to continue providing their services. image: ShebleyCL
Remarkable Responses
Businesses are adapting their delivery models to limit physical contact with customers. Restaurants are shifting to take-away and drive-thru options. Grocery stores are emphasizing home delivery. Other businesses — including veterinary clinics — are using curbside drop-offs and pick-ups, bringing medicines and food to customers waiting in cars.
Companies are responding, and central to this flexibility is the capacity to enable work from home. Businesses without the capability to enable a remote workforce are scrambling to find solutions that permit their firms to continue operating.
Other firms that must remain open and on-site are altering their physical or customer environments. Loblaws and other grocers created special shopping hours for more vulnerable customers and installed plexiglass shields at their stores.
Many manufacturing firms are stepping up to shift their outputs to products required in the new pandemic environment. In Italy, a firm used 3D printers to replace broken respirator valves. In Canada and the United States, automotive suppliers are collaborating to produce ventilators; so are vacuum manufacturers in the U.K.
Distilleries are producing hand sanitizers. Even small firms like Hedley & Bennett, which manufactures aprons and chef gear, have collaborated with a doctor to design and start producing face masks.
In what may become a future norm, conferences are looking to virtual platforms to continue important network events. One such conference, organized by the Group for Research on Organizations and the Natural Environment (GRONEN), is using the crisis to lead with technology solutions to create a virtual conference.
spin studio spinco have developed an on demand service so its members can attend virtual spin classes. image: spinco facebook
Future Conditions
The pandemic is likely to drive changes in the way business is conducted when the current pandemic is contained. After the crisis has passed, we expect that businesses may return to a new normal.
Remote arrangements: We expect more businesses will restructure their work in keeping with changes made during the crisis. Such a move could have a big impact on commuting, congestion and quality of life. Conferences that bring together thousands of people in close physical proximity may give way to smaller gatherings.
GRONEN’s 2020 conference — which is focused on sustainability in the digital age — experiments with new virtual participation strategies. These options might complement the expensive and polluting practice of physical conferences.
Local supply chains: Creating more local supply chains is likely to be a focus of a post-pandemic world. Local supply chains are often dependent on global supply chains across a number of industries.
For instance, in the pharmaceutical industry, the supply of active pharmaceutical ingredients, known as APIs, is dominated by manufacturing facilities in India that process ingredients provided by China. North America is highly reliant on these foreign sources for up to 80 per cent of its APIs.
The situation is similar for ventilators in Canada, with manufacturing firms around the world focused on supplying domestic demand. If the crisis was contained to a single or handful of countries, this problem could be resolved quickly. However, with requests coming from all over the globe, meeting demand is a challenging task.
The coronavirus pandemic has revealed the importance of health care, medical supplies, pharmaceuticals and medical research, and also telecommunication, food supplies and the efficient provision of basic necessities. We are likely to see a greater focus on these sectors and on the critical infrastructure required to provide them.
Prior to the onset of the coronavirus pandemic, the thought that some event could force such a dramatic altering of our society and economy would have been unthinkable. Now, with the world in lockdown, everyone has a shared responsibility to imagine how to build a stronger, more resilient community on the other side. What is your organization’s role?
Martina Linnenluecke, Professor; Director of the Centre for Corporate Sustainability and Environmental Finance, Macquarie University.
