Are retail businesses taking the online approach to cut down on costs?

Calgary retailers reconsider bricks and mortar Some Calgary retailers who moved online in the pandemic are starting to think it’s the only way to go. Tyson Fedor reports.

CALGARY — As retail stores have been limited to 10 per cent capacity in Alberta at various points in the pandemic, and not been allowed to fully reopen, enough customers are heading online to make purchases that it's making retailers reconsider the benefits of bricks and mortar.

Heidi Blanchette, owner of Liz & Lottie gift shop in East Village said with rent prices going up, it’s time to make the switch permanently online.

“We’re making the leap and doing online only,” she said.

“It’s a massive change. With the timing of things, our lease was up for renewal. We had the option to lock in for another five years or to go in a new direction.”

Blanchette said their renewal is up at the end of the month but says there are too many unknowns that could financially cash strap the business.

“Just given the state of the world and the economy, just with the unknown, we weren’t comfortable locking in for five years,” said Blanchette.

She said customers have received the news fairly well.

“We do see the odd people that wish they could touch the items before they buy them, but overall the feedback has been great,” said Blanchette.

“People are supporting us, they say they are going to continue to support us even though we’re online only, so we couldn’t be more happy.”

Blanchette said she hopes she could even be starting a trend.

“I would hope to think that we’re doing the right thing and getting in before when the timing is right,” she said.

THE BAY

Hudson’s Bay Company said it plans to reduce retail space from five floors to three at its flagship Stephen Ave location.

“As we operate with a digital-first mindset, Hudson’s Bay is redefining the role of the store,” said spokesperson Tiffany Bourre in a statement.

“Without any reduction to products, services or staff, the store will utilize three floors as retail space. Beginning this fall we will also fulfill orders through microdistribution from the store, increasing speed of delivery to thebay.com customers in the west.”

A quick scan of rental prices for retail spots along 17th Ave shows nearly a $23,000/mo. rent price for about 5,500 sq. /ft. of space.

The Bank of Canada released a survey last month that asked Canadians about what some of their spending habits will be in 2021.

The survey found that people will exercise caution in spending, but feel vaccines will be the way to more economic growth.

About 46 per cent of people plan to resume the same level of economic and social activities as before the pandemic, while about 28 per cent plan to do less and 25 per cent plan to do more.

“Despite concerns about the virus, confidence around spending has increased. People expect to spend more after vaccination on a wide range of goods and services—especially on travel and social and recreational activities,” read the survey.

MARCH RETAIL SALES DOWN SLIGHTLY

The seasonally adjusted value of retail sales in Alberta contracted slightly in March, by 0.4 per cent ($31.1 million), but was still above both pandemic and pre-pandemic levels.

Year to year, sales were up 26.3 per cent ($1.6 billion) over 2020, and 8.7 per cent ($600 million) over 2019.

Relative to March 2020, retail sales were higher in every sub-sector except grocery stores, which were down 13.4 per cent due to the spike in spending at the onset of the pandemic.

Nationally, retail sales were up 3.7 per cent over February and were up 23.7 per cent over March, 2020.

Month-over-month sales cooled off in Alberta, B.C., Manitoba and P.E.I., but were higher in every province compared to March, 2020.