Shoppers returned to retailers for the holidays despite problems, data shows

Canadian retailers saw an increase in personal shopping during the holiday season, although some small businesses say the boost was not enough to keep the supply chain and capacity constraints from hampering holiday sales.

Foot traffic data from Avison Young, a commercial real estate firm, shows that purchases in stores in Canada grew by 83 percent for local retailers compared to a year ago, when extensive closures in Ontario forced unnecessary stores to rely on curb pickup and online sales for turnover.

“There’s an accumulated demand for personalized shopping experiences,” said Ali Fieder, Avison Young’s vice president of retail and leasing based in Toronto.

Economic and health factors have influenced the increase in shopping. Canadians amassed a record number of savings due to the COVID-19 pandemic, which amounts to about $ 300 billion in excess savings in households, according to some estimates. Meanwhile, an increase in vaccination rates may have encouraged customers to return to retail corridors and malls instead of ordering products online.

Retailers sold 1.2 percent more items in November, according to preliminary estimates released by Statistics Canada last week. Data released in November showed that consumer spending rose 18 percent during the summer months – the second-largest increase in economic activity since the early 1960s – following the end of Ontario’s sharp shutdowns.

While Toronto retailers saw an overall increase in traffic of 114 percent this season, the numbers remain behind 2019 levels.

Patrick Hempelmann, owner of BMV Books, says his local bookstore chain benefited from increased turnout, but suffered from shipping delays and higher costs.

Newly published books arrived months after their expected arrival date, some completely missed the gift season, Hempelmann said. A mass shipment of puzzles that 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 percent below its pre-pandemic intake, Hempelmann said.

“We are doing much better than last year when everything was shut down, but we are still down by a great deal,” he said.

Last week, Ottawa and Ontario announced new support for businesses and employees to compensate for new restrictions designed to slow the spread of COVID-19. Ottawa announced an extension of eligibility for payroll and rent subsidy programs, while Ontario announced a property tax and energy cost rebate program.

A combination of supply chain problems, inflation and government-mandated restrictions have kept retailers from returning to their pre-pandemic growth levels, said Bruce Winder, a retail analyst. Companies have paid a premium for importing products from abroad, as a limited supply of containers pushes up the prices of shipments.

“If the retailers were able to get supplies early or lease their own ships, they probably did quite well. But most small and medium-sized businesses could not really afford to turn their supply chain around, ”said Winder.

Adrienne Orr, owner of Blue Banana at Kensington Market, said she bought products from major brands more than six months prior to the holiday season in anticipation of the Christmas bustle of products. That decision may have saved her a fortune, though rising costs still cut into the gift shop’s overall profitability, she said.

“I saw a lot of other companies going into the 11th hour to get inventory while we had already planned our season,” Orr said.


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