WAITING FOR CUSTOMERS TO RETURN IN THE PROVINCE’S ECONOMIC REBOOT
Slow start for worried retailers who hope to mitigate losses from pandemic shutdown
The first two days are over.
For Rhonda Fairhurst, owner of Country Living Furnishings & Design in southwest Calgary, the reopening of her business on Thursday proved to be a slow start.
And Friday wasn’t much different.
“Day one ended and we just had one customer, around noon. They bought some accessories and that was it,” Fairhurst said Friday, pegging the first-day sales at $400.
“That’s a bit worrisome, but I think as time goes on people will feel more comfortable ... We need at least $2,500 a day to pay our bills.”
It’s still early days in the relaunch of Alberta’s economy following a government-ordered shutdown to slow the spread of the coronavirus.
For two months, Albertans were told to stay home and avoid unnecessary trips to the store. About 25,000 businesses had to close because of the public health orders, affecting 300,000 jobs.
Now, some retail businesses previously forced to close, such as clothing outlets and furniture shops, can open again, although with new safety protocols.
However, simply turning on the Open For Business sign doesn’t magically flick a switch on a $350 billion economy. Nor does it capture the magnitude of the damage done to the bottom line of businesses in the past two months.
A gradual restart of the economy has left entrepreneurs like Fairhurst and Elena Achilleos, owner of La Chic designer clothing store in downtown Calgary, adjusting to a new normal.
“Our first day was fine. Our second day today is dead down here,” said Achilleos, whose store is located on the second floor of Bankers Hall.
“The night before (reopening) I was worried about traffic and are people going to come out? Will they be interested in shopping? Are they worried about leaving their homes?
“And I am still worried about that.”
Achilleos notes the Plus 15 network is still closed by the city, making it difficult for people to navigate through the downtown and access stores that are now open.
Calgary Chamber of Commerce CEO Sandip Lalli said the No. 1 issue in the restart will be to instil confidence in consumers that it’s safe to go out, visit stores and spend money.
She’s also heard similar issues being raised by local business owners who have begun operating this week.
“No customers. No foot traffic,” Lalli said. “No one is knocking on their door just yet.”
For Fairhurst, her store closed in mid-march after the government declared a public health emergency in the province. Four employees were laid off as the outlet was temporarily shuttered.
The company had to pay $30,000 in monthly rent for
April and May, although Fairhurst learned Thursday she will receive some rent relief from her landlord as part of a federal-provincial program.
However, closing for two months cost the business a couple of hundred thousand dollars in sales, as March and April are two of her busiest months.
Part of the business also involves going into people’s homes and helping them with their interior design; that work also ceased in the shutdown.
“As a successful company, you have a little bit of (cash) stockpiled, but we don’t have enough for two months and we are opening today almost flat broke,” she said.
“You don’t save $100,000 for a rainy day as a small business.”
The company has accessed the federal emergency wage subsidy and the Canadian Emergency Business Account program, which provides interest-free loans to small businesses.
Given the size of the company’s 8,000-square-foot showroom, social distancing is easy to maintain. The company has acquired masks and hand sanitizer, and her staff makes sure door handles and the payment machine are wiped down.
The key business issue in Fairhurst’s mind is how long it will take for customers to return.
“I am really apprehensive about that, if the people will come,” she said.
Although Achilleos works in a different industry, she has similar concerns.
The downtown business has been open in Calgary for 44 years and has a loyal customer base.
Operating a clothing store, Achilleos had to put new protocols in place for steam sanitizing all garments customers try on. Masks and gloves have also been acquired for the staff.
She had to lay off two employees during the closure, although with the federal wage subsidy being extended until the end of August, Achilleos is considering bringing another back.
Even for an established retail business, there are challenges ahead.
The store had thousands of dollars in spring and summer merchandise delivered from Europe before the mandated shutdown. Some inventory may have to be discounted.
With little walk-in traffic and even some longtime customers wary about leaving their homes, she said it’s hard to know how quickly things will bounce back.
“Right now looking outside, I am petrified; there’s nobody in the malls,” Achilleos said Friday over the lunch hour. “But I have to wait for a while in order for me to gauge the situation.”
While customers are cautious today, she is confident they will eventually return. The question is exactly when will that happen?
“People are going to come back again, they are going to go to restaurants and bars and do everything they were doing before. It’s just a matter of time,” she added.
“Fingers crossed we will all see some light at the end of the tunnel.”
At Annabel Tully’s Kismet boutique on 10th Street N.W., customers seeking a retail fix will find things are quite different now than they were prior to COVID-19.
The women’s clothing shop, located in Calgary’s trendy inner-city neighbourhood of Kensington, opened for in-person shopping on Thursday after more than six weeks of offering curbside pickup and delivery only. But for now, rather than dropping in and browsing, Kismet customers are asked to book a one-hour private shopping appointment to allow for physical distancing within the small store.
“I can’t maintain six feet of distance in this small space, so we’re doing appointment-only,” said Tully, who — like many business owners participating in Phase One of the staged reopening of Alberta’s economy — spent the last several weeks brainstorming creative ways to meet public health guidelines and keep employees and customers safe. In addition to physical distancing measures, Kismet customers will be required to wear masks, and asked to carry their own items to the fitting rooms. Tully will also “park” any clothing for 24 hours after it has been tried on, steaming it thoroughly before returning it to the racks for other customers.
Kismet and its “partial opening ” is an example of the strangeness that is being experienced across the city — not just in Kensington, but in other “destination districts” like 17th Avenue, Chinatown, Inglewood and Mission. These are shopping and dining meccas that depend on large numbers of customers but it may be a long time before the crowds come back and a long time before business owners even want them to, at least in large numbers.
“We want to be here for people who enjoy coming here, but we want to be here safely,” Tully said. “Each business is just trying to manage that as best as they can.”
‘A LOT OF TREPIDATION’
Calgary’s business community has weathered major disruptions before. More than 4,000 Calgary businesses were temporarily closed after the 2013 flood. But once that mess was cleaned and damage repaired, businesses were able to welcome customers with open arms.
This time, the situation is different. While restrictions are gradually being lifted, the threat of the virus is by no means gone. Caution is the word of the day, and many businesses who have been granted permission to reopen are choosing not to. Those that are reopening are doing so with new ways of doing business and no idea what the future will bring.
“What I am hearing from my members is a lot of trepidation,” said Annie Macinnis, executive director of the Kensington Business Revitalization Zone.
Macinnis said for those who have been completely closed for weeks, taking on the startup costs of rehiring staff and ordering inventory feels like a big financial gamble. In Kensington, some businesses aren’t willing to take that chance yet out of fear that COVID-19 cases rebound and the province goes into lockdown again.
“The expression I’ve heard from a lot of businesses is, ‘I don’t want to put profits ahead of the safety of my employees.’ Even if that means I go under,” Macinnis said. “There’s fear, and yet there is an imperative for businesses to try to survive.”
At Swizzlesticks Salonspa on Kensington Road, owner Brianna Hallet is one of those who decided to wait. Hair salons were originally supposed to receive the green light to reopen on May 14, but Hallet chose to set a later opening date of May 26 — a decision she was grateful for after the province pushed the reopening time frame for restaurants and salons back by 10 days in Calgary.
Even now, Hallet has held off making any big “grand reopening ” announcements, even though she is still working busily to prepare for the relaunch.
“I guess I just need to get in touch with my spidey sense a little bit to see whether we’ll actually be able to open on the 26th,” she said.
HARD TIMES AND HOPE
Even before the pandemic hit, business owners in Kensington had been struggling with a weakened economy, increased labour costs, and rising property taxes as a result of the “downtown tax shift.” As empty downtown office buildings shed value and left a massive hole in municipal finances, business owners outside of the core have been left to pick up what’s left of the tab. In Kensington, where assessed values are high, some small entrepreneurs have seen their property tax bill double or even triple over the past four years. Now, revenues have all but disappeared.
Michael Bogale, owner of Marathon Ethiopian Restaurant on 10th Street N.W., has been operating on a takeout basis since the pandemic began, but said that model is nowhere near sustainable.
“We are on one of the high-traffic streets in Calgary, and as you can imagine, our rent is not cheap,” he said. “The delivery and pickup model will not cut it at all.”
Still, Bogale said making a go of it with the new capacity restrictions and requirements for physical distancing won’t be easy either.
Bogale has decided to hold off reopening Marathon for a few weeks. In the meantime, he worries about the health of Kensington as a whole.
“There are already two or three businesses that I know of that will be gone permanently,” he said. “And that has big implications for everybody else, because the more businesses that are here, the more success you have.”
Macinnis acknowledged those fears are real but said she remains hopeful that crowds of pedestrians, shoppers and diners will return.
“Kensington has been a shopping destination for over 100 years,” she said. “We made it through the last pandemic (the 1918 Spanish flu), we made it through two World Wars, the flood — I am confident that the business district will survive and thrive again.”