Canadian retailers saw an increase of in-person shoppers during the holiday season, though some small businesses say the boost was not enough to keep supply-chain snags and capacity limits from hampering holiday sales. Foot-traffic data from Avison Young, a commercial real estate firm, shows that in-store shopping in Canada grew 83% for local retailers compared to a year ago, when sweeping lockdowns in Ontario forced non-essential stores to rely on curbside pickup and online sales for revenue.
Economic and health factors have influenced the shopping surge. Canadians amassed a record amount of savings due to the COVID-19 pandemic, amounting to about $300 billion in excess household savings by some estimates. Meanwhile, a rise in vaccination rates may have encouraged shoppers to return to retail corridors and malls rather than order products online.
Retailers sold 1.2% more goods in November, according to preliminary estimates released by Statistics Canada. Data released in November showed that consumer spending surged by 18% over the summer months — the second-largest increase in economic activity since the early 1960s — following the end of Ontario’s harsh lockdowns. While Toronto retailers saw an overall foot-traffic increase of 114% this season, the figures remain behind 2019 levels.
Patrick Hempelmann, owner of BMV Books, says his local bookstore chain benefited from increased shopper turnout but suffered from shipping delays and higher costs. Newly released books arrived months after their expected arrival date, some missing the gift season altogether, said Hempelmann. A mass shipment of puzzles, which the store typically receives in mid-November, arrived five days before Christmas this year due to congestion at the Port of Los Angeles.Overall, BMV’s revenue is still 20% below its pre-pandemic intake, Hempelmann said.
During the week of December 20, Ottawa and Ontario announced new supports for businesses and employees to compensate for new restrictions designed to curb the spread of COVID-19. Ottawa announced an expansion of eligibility for wage and rent subsidy programs, while Ontario announced a rebate program for property tax and energy costs for businesses.
A combination of supply-chain issues, inflation and government-mandated restrictions have kept retailers from returning to their pre-pandemic growth levels, said Bruce Winder, a retail analyst. Businesses have paid a premium to import products from overseas, as a limited supply of containers pushes up prices on shipments. “If the retailers were able to get supply early, or lease their own ships, they probably did pretty well. But most small- to medium- sized companies couldn’t really afford to pivot their supply chain,” said Winder.
Adrienne Orr, owner of Blue Banana in Kensington Market, said she purchased products from major brands over six months in advance of the holiday season in anticipation of the holiday rush on products. That decision may have saved her a fortune, though rising costs still cut into the gift store’s overall profitability, she said. “I saw a lot of other businesses scramble at the 11th hour to get inventory while we had already planned out our season,” Orr said.
Source: The Star