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Saskatchewan Retail Takes Pandemic Hit and is Seeing Recovery: Interview

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Considering the impact the COVID-19 pandemic has had on the retail industry across the country, retailers in Saskatchewan feel fairly fortunate to have survived the economic downturn.

Melissa Newton, Client Advisor of The Commercial Group and based in Saskatoon, said the province had the first lockdown which was nationwide at the beginning of the pandemic in the Spring of 2020.

Melissa Newton

“And from there we’ve really been open for business on a retail basis since June or July of last year,” she said. “We had a pretty free summer. Our case load was quite low. People were hesitant. There was not a lot of movement in 2020. But businesses were continuing to stay open.

“We did lose some restaurants right at the first lockdown. Not as many as we thought we were going to. And then 2020 kind of moved along. In terms of activity, it was very low but the stores were doing well. People were supporting local. I know last year sporting goods and bikes were through the roof. People could not find anything to buy. That was really good for those sectors.

“Home improvement, renovations, all of those areas did really, really well. The fashion retailers definitely struggled. But people were still buying little gifts. They were spending more time in their homes. Fashion did take a hit which was unfortunate but that we saw affect the enclosed mall business more than just private businesses here.”

Downtown Saskatoon (Image: DTNYXE Facebook)

Come January, “it’s been busier than heck here,” explained Newton.

Saskatoon retail is now doing well. There has been plenty of activity in the commercial real estate sector. Businesses are making some moves and there is a sense of optimism. Owner/users are taking advantage of interest rates looking to purchase some buildings.

“We have medical groups absorbing some of the old restaurant spaces or just a larger retailer that didn’t make it or already vacant on the market. We have dental groups taking those over. Physio seems to be doing well. Obviously pharmacies and medical users,” explained Newton.

“Ghost kitchens also seem to be a thing or people sharing space maybe running two or three concepts out of one kitchen. That seems to be another trend that’s happening. We’re really, really busy right now. But I think July or August we’re going to see everybody take off for holidays because nobody has taken a holiday for a year.

Saskatoon (Image: DTNYXE Facebook)

“I really expect the rest of 2021 to be just moving along and having a really great year. If you were to walk around downtown you would hardly know that we had a pandemic. Like there’s not a million for lease signs by any means. There’s definitely some inventory don’t get me wrong but it’s not like the sky is falling.”

According to a Q1 Saskatoon retail market report by ICR Commercial Real Estate, despite a challenging year in 2020, there were no major changes in the Saskatoon retail market quarter over quarter as the vacancy rate contracted slightly to 5.18 per cent this quarter.

2020 saw more local retailers following national brands in pivoting to introduce online ordering, curbside pick-up, and speedy delivery as they recognized the importance of providing a safe and easy experience.

“In 2021, convenience has become a new feature consumers look for while shopping and choosing a restaurant. Quick-serve restaurants also sought real estate with convenient drive-through capabilities. Brands that previously did not operate with drive-through lanes began to implement this strategy for the future,” said the report.

“Google mobility data for Saskatoon indicated that consumer movement in retail and recreation recovered faster than the national average and performed three times better than in the last quarter of 2020, but this activity remains six per cent below the baseline of normal activity that occurred before the pandemic.

“Even though government support programs, landlord deferrals, and businesses shortening expenses all helped to flatten the anticipated vacancy spike in the Saskatoon retail market, the market is still expected to experience a rise in vacancy later this year.”

Image: Regina Downtown BID

In its Q1 report for the Regina retail market, ICR said that city too experienced no major changes quarter over quarter despite the challenging year. The vacancy rate declined insignificantly by only 20 basis points to 6.67 per cent in the first quarter of 2021.

Like Saskatoon, convenience has become a key for consumers in the market.

“Google mobility data for Regina indicated that consumer movement in retail and recreation recovered faster than the national average and performed better than it did in the previous quarter, but this activity remained 20 per cent below the normal baseline level of activity that occurred before the pandemic,” said ICR.

And like Saskatoon, Regina retailers benefited from government support programs, landlord deferrals, and businesses cutting expenses. That all helped to keep the vacancy rate down but ICR said the market is still expected to experience a rise in vacancy later this year.

“Overall, consumers continued to spend money, but convenience will be a critical factor in 2021. Retailers, both national and local, will need to continue to look into strategies to improve their operations in order to stay afloat,” it 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 now works on his own as a freelance writer and consultant in communications and media relations/training.

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