A financial divide among local businesses and big box stores, widened in the early days of the pandemic, will likely get even wider in what is expected to be the "most online" holiday shopping season ever.
Customers across the country plan to spend more than two-thirds of their holiday budgets at big businesses, suggests new research and polling from the Canadian Federation of Independent Business released Wednesday.
"It’s an existential threat to what’s already been a difficult time for local outlets," says Jonathan Alward, CFIB’s director in Manitoba — where a recent surge of COVID-19 cases is worrying small shop owners about a season they were hoping would help make up for months of pandemic losses.
Seven months since early shutdowns, data shows only 30 per cent of independent businesses are back to making normal sales, as 72 per cent are now open and 48 per cent are fully staffed on average.
But with up to 24,000 retail firms still at the risk of shuttering permanently on top of those that have already closed, an overwhelming majority of business owners — at least nine in 10 — believe large stores like Walmart, Costco and Amazon threaten their sales during a make-or-break time.
"Frankly," said Alward, "if people don’t shop local now, small business just won’t survive."
For Curtis Colatruglio, who runs Antler World Dog Products at Kildonan Place, that couldn’t be more true.
"Our business is mostly based on traffic and normally, this is the time we’d wait for all year to make up our biggest bucks," he said Wednesday. "But because of this back and forth in restrictions, it’s a massive reduction in traffic in the store and the mall as a whole."
While the business owner has set up an online shopping site for his customers, he says he doesn’t think he can compete with larger stores that people are now turning to.
"This is my personal business and it really is a one-man show," he said. "I’ve had several times where I’ve had to think to myself, should I really be doing this anymore? Can I survive?"
Meanwhile, big businesses are thriving through the pandemic, according to their recent earning reports.
Amazon Canada made 133 per cent of its usual revenues for this time of the year, while Costco made 105 per cent and Walmart Canada made 106 per cent.
“This is my personal business and it really is a one-man show. I’ve had several times where I’ve had to think to myself, should I really be doing this anymore? Can I survive?” — Curtis Colatruglio owner of Antler World Dog Products
On top of that, CFIB believes more customers are now "showrooming" when they visit local businesses — meaning they’re walking into stores to look at products and buying it for less from an online competitor or big box store.
But Dan Pontefract, a leading business strategist who consults for large companies like Salesforce and TD Bank, says "it doesn’t have to be that way."
"To be quite honest," he said in an interview, "I’m not seeing enough of a fight from small business — it’s a lot of mantra and not enough gumption."
Pontefract said local entrepreneurs should instead to look to "corporate strategies that have made the Amazons of the world so successful."
That means pairing up to compete with larger chains, he said, and creating ads "that have more chutzpah and can maybe, you know, actually make fun of the big guys — and offer things they just can’t."
"Customers don’t care about where they get their stuff from, they want convenience," he added. "And if businesses want to compete with that, why not give more convenience by offering things like local deliveries and collaborative discounts?"
It’s advice that Aubrey Margolis of Danali clothing store says he’s taken to heart.
"Of course, I’m worried about our sales looking much thinner this year — I’m not naïve to that," he said. "But I know that our customers know our products are unique and specific to what they want.
"That’s the kind of thing I’m hoping will save us this holiday season."
Temur Durrani reports on the economic impact of the coronavirus pandemic for the Winnipeg Free Press. Funding for this Free Press reporting position comes from the Government of Canada through the Local Journalism Initiative.