Easing of Retail Lockdowns in Ontario This Month Still Not Enough to Save Many Businesses: Experts

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The easing of some health restrictions on businesses in Ontario announced on Monday is a small, positive step but the Canadian Federation of Independent Business says thousands of small businesses will remain in full lockdown even after February 22. 

“Small retailers will breathe a sigh of relief as Ontario will soon allow all retail businesses to reopen to in-person sales in the next few weeks, including at 25 percent of capacity in grey zones,” said Dan Kelly, President of the CFIB.

“This will finally end the bizarre and ineffective Ontario-only policy of allowing big box stores to sell in-person while barring small firms from doing the same. Retailers across the province will have been closed for at least 108 days since the Spring 2020 lockdowns began (33 percent of the pandemic) as of next week. By the time they reopen, those in Toronto and Peel will have been closed for 147 days (44 percent).

Dan Kelly
Dan Kelly

“For many businesses, particularly in Toronto, Peel, and York, today’s announcement will mean that they will move from a province-wide lockdown to a regional lockdown on February 22, 2021. This is deeply unfair and will mean that in-person dining, personal services like hair and nail care, and gyms will remain in full lockdown with no end in sight. By February 22, personal care services in Toronto and Peel will have been closed for a total of 183 days since the Spring 2020 lockdowns began, or roughly 55 percent of the pandemic. Gyms and indoor dining in Toronto and Peel will have been closed for 220 days (66 percent of the pandemic).”

Kelly said the CFIB will continue to advocate for a safe pathway for all small firms to reopen to in-person sales as it urges the government to move the hard caps for sectors like gyms, salons, events and restaurants to a capacity limit or other measures that better reflect their work and space.

“While reopening is a step forward, we aren’t out of the woods yet. While some businesses will soon be permitted to open, they will be reopening to capacity limits and government advice for consumers to stay home at a time when consumer activity is naturally lower, even in a good year,” said Kelly.

“75 percent of Ontario’s small businesses report that government programs are crucial to their survival in 2021. It is especially important for businesses to have broad access to government support programs. We continue to urge the government to expand the Ontario Small Business Support Grant eligibility criteria, and to broaden the $1,000 PPE program’s eligibility while increasing the PPE funding available to each applicant. As businesses reopen, it is crucial that they have the support they need to survive and to meet their health and safety obligations.”

On Monday, the Ontario government said it is moving to a regional approach and maintaining the shutdown in the majority of the public health regions in Ontario, including the Stay-at-Home order and all existing public health and workplace safety measures. 

Sign spotted by Retail Insider in Toronto. Photo: Dustin Fuhs
Sign spotted by Retail Insider in Toronto. Photo: Dustin Fuhs

When it is safe to do so, the province will gradually transition each region from the shutdown measures to a revised and strengthened COVID-19 Response Framework: Keeping Ontario Safe and Open, it said.

“Our number one priority will always be protecting the health and safety of all individuals, families and workers across the province,” said Premier Doug Ford. “But we must also consider the severe impact COVID-19 is having on our businesses. That’s why we have been listening to business owners, and we are strengthening and adjusting the Framework to allow more businesses to safely reopen and get people back to work.”

The government said it has updated the Framework to allow for a safer approach to retail. Limited in-person shopping in Grey-Lockdown zones will be permitted with public health and safety measures, such as limiting capacity to 25 percent in most retail settings. In addition, public health and safety measures in retail settings will be strengthened for other levels of the Framework. Individuals will also be required to wear a face covering and maintain physical distance when indoors in a business, with limited exceptions, it said.

Bruce Winder, author of RETAIL Before, During & After COVID-19, said Ontario’s easing of restrictions will provide a desperate lifeline to thousands of non-essential retailers who are sinking a little more every day. 

Bruce Winder
Bruce Winder

“Operating at 25 percent will certainly help small and medium-sized retailers who were struggling. It does not mean that they are out of the woods yet but at least they have a chance for survival until the country is vaccinated – presumably by the fall,” said Winder.

“We must be careful though as a society not to underestimate the several COVID-19 variants that are making their way through Canada as they could put us back to lockdown status quickly.  It has been alarming to see so many big box stores in violation of the rules imposed since December 26 in Ontario which gave them a clear and I would say unfair market advantage within the industry.”

Veteran retail expert George Minakakis, a global retail executive with over 25 years of experience, wondered what kind of an environment these businesses will be opening back up to as on Monday Ontario had more than 1,300 reported new cases of coronavirus.

“We shut down when we were around similar numbers. Clearly, with reopening and mandatory masks and social distancing, the pattern has been that numbers will climb again. And now we have two, three variants to be worried about as well,” said Minakakis, CEO of the Inception Retail Group.

George Minakakis
George Minakakis

“Obviously, businesses will not survive with rolling openings and closures. However it looks like the kind of cycle we will be in for the rest of this year. Vaccines are on the horizon at least that’s what we are being told. 

There are over 1.2 million small businesses in Canada representing 98 percent of all businesses and Ontario has the largest share.

“I am reluctant to say that people will storm back out with pent up demand to shops, restaurants or malls. Certainly there will be services like hair stylists and salons that will have customers waiting.  But I don’t see rational consumers rushing out to hit a bar or restaurant. The demand for new clothing to wear at work continues to be in decline. New behaviours are settling in as we see our savings increase. We are also opening in the slowest seasonality of the year.”

Minakakis said he has seen news reports about luxury brands saying they don’t see a rebound until 2022.

“I am a little longer, taking into account delays on vaccines and reluctant consumers who even after receiving their immunization they will wait. My estimation is that anyone over 55 and with underlying health issues will not be blazing a path to shop at this time. That’s a big portion of the population that will not take chances. Businesses cannot survive on 20-50 percent less traffic,” he said. 

“Businesses need to reopen but like I said; to what kind of environment?  Not one that is fully open for business.”

Gary Newbury, retail supply chain and last mile interim executive, said the easing of restrictions will be most welcome across the whole of the retailing industry within Ontario on the face of things, however, the challenge will be for the industry to help keep people safe to avoid restrictions being ratcheted up again. 

Gary Newbury
Gary Newbury

“Many businesses have been really struggling to get this far, especially the small to mid-sized enterprises — independent stores and food service outlets, and personal service businesses — who often needed to accelerate their digital capabilities quickly and may have found this to be unprofitable forcing some to close and wait for reopening,” he said.

“We will start to see much change in our streetscapes and malls. Even before Boxing Day, when Ontario was subject to a stay at home order, there were many stores being closed down or in various stages of being boarded up in the absence of alternative retailers rushing to fill those spaces.

“One of the biggest questions we need to ask as an industry is will consumers want to return to stores or maintain their buying patterns with online services — click & collect/curbside and home delivery. Some will revert to their previous shopping habits in some categories, such as apparel, but for others, new habits may continue apace. There is no real data we can use to predict with any certainty which way things will go, especially with delays occurring with vaccinations and continued fear of COVId maintained by large subsets of the Ontario population.”

Although regional lockdowns which allow targeted actions to contain continued spreading of the virus are logically sound, many people drove to zones in lower levels of restrictions to do their shopping, added Newbury. If there is a regional strategy, retailers should be mandated to ensure local residents are being admitted to malls and stores to help avoid a growth in cases, once again, he said.

Article Author

Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior National Business Journalist with Retail Insider in addition to working on his own as a freelance writer and consultant in communications and media relations/training.

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