How Canadian retail Stores are preparing for Christmas
Christmas is just around the corner and for retailers, it’s actually a time when profits and sales are skyrocketing. A plus is expected again this year. More than 1% increase in sales is expected in Canada. However, the partial lockdown ensures that these developments will primarily affect online retail, which has already benefited significantly in recent months. On the other hand, it’s different when you take a look at the shopping streets and shopping malls. Here the economy has come to a point of worry.
Inner-city retailers are worried in Canada
The inner cities are empty. No Christmas market lures customers into the fray. You cannot feel the Christmas spirit. Occasionally, customers walk through the shop door or wait in front of it, as only a couple of people are allowed to be within the patronize an equivalent time. Downtown retail is groaning under the load of the regulations and restrictions imposed by the partial lockdown. That may probably not change in the Christmas business either. The restrictions are extended and therefore the restrictions affect not only the small shops but also the big chains. The developments are particularly noticeable in the inner cities and also the fashion houses are particularly affected.
The trade association points out that fashion houses are among the shops that generally benefit less from the Christmas business. If there are now also restrictions on the number of consumers who are allowed to enter the shop, this may cause very sharp drops in sales for one or the other retailer.
A plus is expected – but not for the inner cities
Earlier assumptions that individuals are more cautious in times of Corona and tend to stick their money together don’t come true, at least in the run-up to Christmas. Compared to last year, the dealers expect a rise in sales, which is around 1.2%. However, this also doesn’t apply to the dealers in the city centers. Instead, online trading benefits. Many of us have long lists when it comes to buying Christmas gifts. Instead of strolling through the town center with a mask and searching for one gift after another, this is done conveniently online. With just a few clicks, the items land in the shopping cart and the price comparison is also easier.
Online trading has increased significantly in strength in recent years. However, it can be said that the Corona crisis made him a winner – at the expense of local businesses. Up to a 3rd increase in sales in online retail is expected. Here the trade association assumes that this doesn’t only affect the large businesses. Small retailers who have already seen the trend should also benefit. In the last few months, many stores have focused on getting into online trading themselves or offering their customers alternatives. Free delivery services within the area or selection on the internet and then collection directly on site are possible alternatives that customers are also happy to accept. But whether that’s enough to save downtown businesses.
Traders in the city centers are seriously threatened in their livelihoods. Almost 50% are affected. The threat goes thus far that some of the inner city retailers are even facing bankruptcy. In surveys, 60% state that they consider it harder to be able to cover the loss of sales in the future and thus have problems to survive with their business in the long term.
Many shops in the city centers take a large part of their sales, especially in the months of November and December. The partial lockdown, which was decided in November and now extended, has a strong impact on revenues. The city centers are therefore facing major problems. The concern is that some of the inner cities may even have great difficulty getting over lockdown and then being filled with life again in the future. The trade association therefore involves a fund to be set up to support the city centers.
Christmas markets and restaurants are missing for the shopping experience
For city centers, it isn’t just a problem that the rules have been tightened. Many of us visit the city because we want a special experience. You combine Christmas shopping with a stroll through the Christmas market or meet friends in a café or restaurant. Before or after, they stroll through the city and let themselves be tempted not only to buy Christmas presents, but also one or the other piece from the series. This is now less the case.
Appointments during the Christmas season are becoming fewer and fewer, as there are restrictions here. Meetings in cafes or restaurants are currently not possible. Therefore, it’s hardly attractive for people to drive to the city center. Anyone who does it anyway does it mainly because he has to. Then again, he will only buy what he needs. This is also noticeable in sales.
No government subsidies for open shops
Another problem at this point is that there’s no ban on shops from opening. Therefore, they’re not entitled to any state aid, as is currently made available for other industries, such as the gastronomy. Without help, it becomes even harder for businesses to bridge the gap. The reason for this is that the prices continue to arise. Rent has to be paid and employees have to be remunerated. However, if the income falls, it’s no longer so easy to cover the costs
Therefore, dealers are now demanding more and more government aid. They point out that the break-ins from the last few months should be absorbed by the Christmas business. Since this cannot take place to the extent that’s to be expected, this hope is no longer present. This primarily affects stores that offer fashion and shoes. But other retailers also are suffering a lot. So far, however, no government aid is planned to make sure that the city centers don’t lose life in terms of business.
Black Friday has been a big exception
On Black Friday, a look into the city center showed that there’s another way. The reason offers lured people into the city center and ensured that long lines could be seen in front of the shops. But this applied primarily to the large dealers. Shops such as Walmart and Costco were well filled. Sometimes people stood in line for over two hours. But they only took it upon themselves because they could expect high discounts. Especially in the case of technical devices, these are very extensive. But that was an exception. A few days before that, the sight was completely different. Empty squares and streets, in the shopping centers it wasn’t difficult to keep your distance.
Supermarkets also have problems with the restrictions
Supermarkets also seem to be among the winners of the crisis. Here one can only think of how the Canadians hoarded. Piles of toilet paper and other goods were brought home from the shops. The traders didn’t come after to meet the demand. Now the Christmas business is just around the corner. This is also an important time for supermarkets. They also make a special turnover here. But that does not work with the current restrictions. Customer demand will increase in the coming weeks. The supermarkets cannot meet this demand because the restrictions on the number of customers per square metre prevent it. Long queues are expected and worries increase.
Business problems are not limited to the Corona crisis
In fact, from an economic point of view, it’s important not only to blame the Corona crisis for what’s currently happening. The restrictions imposed by the government are part of the matter. However, they’re not the only reason why people are turning to online shopping and, in reference to this, are increasingly buying their Christmas gifts there too. In fact, online trading has gained more prominence in recent years. This is due, among other things, to the fact that the choice is much larger here. At the same time, the advice in the local shops is often no longer what customers expect. There are also complaints about service. Many shoppers state that they’re often not treated nicely and that there are more problems with returns.
The price differences are also not to be underestimated. People have found that they can get a lot of the pieces they want for significantly less if they order them online. We aren’t just talking about a few dollars here. Even amounts in the double-digit range aren’t uncommon.
Entry into online trading has been missed by many companies
It was not only known since the Corona crisis that interest in online trading is increasing. Many companies and even entrepreneurs have missed going online with online business. They either did not have the time or the cash to invest. But there are enough entrepreneurs who simply haven’t seen the necessity to start out a web business. For these reasons, a trend was missed that can’t be jumped on in the short term.
How much profit the stores miss out on is also shown in a survey of the stores that have repeatedly promoted the expansion of online trading. These are often large stores like Walmart or Costco, which are also vital to investors. In a survey, they indicated that they had a clear plus in sales from online trading. This is more than 50%. even though the stores themselves are also badly affected by the restrictions on local trading, they can keep losses down with the income from the online business.
Opening on Advent Sundays is no solution
There are some state governments that have suggested that retailers also open on all Advent Sundays this year. This possibility should make sure that people drive into the city centers who otherwise have no time or don’t know what else to plan on Sunday. Even short-term purchases would be much easier in this way. However, the proposal was an initial solution. However, it quickly became apparent that not everyone agrees with this.
Conclusion: Not only the partial lockdown has an influence on the development of the inner cities. The inner cities are slowly dying out – that’s the statement made by many entrepreneurs. The hint for the reason goes in the direction of the rules in the current partial lockdown . But actually it’s been shown that this is one of the reasons that interest in shopping in the city centers is waning. But many entrepreneurs have also missed the jump on the online shopping train.