TOUGH WINTER FOR LOCAL BUSINESS
By Kirk Winter
Businesses in the City of Kawartha Lakes have found the last three months financially trying, and a number are trying to figure out if this 2019 slowdown is an anomaly, or the sign of things to come.
I spoke to a number of local businesses spread over CKL and Haliburton to get a feel for how their winter had been, and what they felt were the reasons beyond the usual for a slow late winter sales season.
The feedback I received was eye opening. Words like “crippling”, “abysmal” and “record poor sales” dominated the conversations. All said that they expected a slowdown after Christmas but that this one has been especially hard with some businesses reporting sales down as much as 66 percent over this time last year. One Lindsay retailer reported entire weekend openings producing not a single sale.
Not a single retailer, from fashion to hardware to automotive I spoke to said that this had been a “normal winter”. One larger retailer told staff to take their holidays in February, or face the possibility of having no work that month.
When I asked these retailers what they thought was driving this much tougher late winter sales downturn, I received six very different but interesting answers:
The General Motors effect
Cancellation of Basic Income
Snowbirds leaving in larger numbers and staying away longer
“Weather Network” effect
Actual inclement weather
A number of local retailers spoke of the impending GM plant closure in Oshawa as something that is already being felt throughout the south of CKL. Mayor Letham estimated that 1,200 of the 2,500 production line employees losing their jobs at the end of 2019 live in the City of Kawartha Lakes. Conservatively estimated, the income for these workers together adds up to $84 million a year – a considerable amount of money to be spent at local stores and restaurants. With little hope of finding an equivalent job, many GM workers have tightened their purse strings and are trying to save as much as they can in preparation for January 2020.
A number of Lindsay area retailers suggested the winding down and cancellation of the Basic Income Project has impacted their businesses directly. Basic Income paid significantly more than Disability or Ontario Works, and after paying rent, those on Basic Income spent their money at grocery stores, coffee shops and local businesses. One grocery store I spoke to said they have “never seen it slower than it has been the last six weeks”, while correspondingly business at local food banks is at near record levels.
Whether the City of Kawartha Lakes wants to admit it or not, the local economy is certainly fueled by affluent seniors who have relocated here from the GTA and other urban areas. These people are often comfortably well off and they are not afraid to spend. In the summer, their affluence drives the economy in many small communities as they patronize local shops, restaurants and marinas. A local travel agent I spoke to reported an uptick in local seniors not only travelling but staying longer out of country in exotic warm locations like Costa Rica and the Dominican Republic. The dismal Canadian dollar has made these destinations more attractive as Florida and the Carolinas have become price prohibitive. If a club I belong to can be used as an example, winter travel this year was at record levels in both numbers and duration. That amounts to millions of dollars being spent somewhere else between typically December and the end of April.
When I heard the “Weather Channel effect” numerous times, I had to ask for more explanation. While retailers said they appreciated the availability of up-to-date weather forecasting to keep friends and family safe while travelling, they had a “bone to pick” with weather providers and their seeming tendencies to “exaggerate what severe weather was and how damaging it could be.” Retailers shared with me that when that red weather warning bar went up on the Weather Network website for a certain day of the week, storm or not, sales were off 75 percent as people had re-planned their weeks around supposedly dangerous weather. Retailers also wondered the value of the warning going up as much as a week before the weather event possibly happening. A number of businesses also pointed out, anecdotally, how many times the weather forecasters had been wrong since Christmas and how many cancelled shopping trips Environment Canada and the Weather Channel were responsible for.
To be fair to the intrepid meteorologists of the Weather Network and Environment Canada, the last 12 weeks have featured some of the poorest weather that drivers in CKL have ever seen. Snow, ice, freezing rain and wind have made getting out to shop very difficult, and many local businesses admit to that. A record number of school bus cancellations since January has been a pretty good indicator of what travelling has been like for much of the last three months. One local women’s store admitted that they hadn’t seen some of their most loyal customers since Boxing Day, and these individuals have not gone south. When it is even hinted that the weather could be bad, they stay home. This store owner is waiting desperately for a spring thaw so her customers “can come out of hibernation.”
The final factor cited by almost everyone I surveyed is truly the “elephant in the room” to anyone with a brick and mortar retail operation – online shopping. Online shopping is weather proof and can be done from the porch of your vacation home in Honduras. It also provides endless variety and the retailers never close. For exotic items, no trip to a larger centre is needed. I knew online shopping was a “thing” when one acquaintance had a 62-inch flat screen television shipped to his home after purchasing it from Amazon, and another acquaintance bought his winter tires online, and not from a traditional automotive retailer. A number of retailers told me that with online retailing cutting dangerously into their bottom lines, students looking for summer employment this year to pay for college and university will be hard pressed to find that work as they won’t be hiring.
A number of well-established local businesses said that if spring sales don’t rebound in a serious way, they will be reconsidering hours, staffing levels and their brick and mortar locations.
All said they would find it difficult to survive what might be the “new normal” for retail if what they just weathered the last 12 weeks extends much beyond Victoria Day.
Take a look through the pages of our newspaper and note the many fine retailers and service providers who advertise here. Don’t be afraid to shop local. These people are your neighbours and they need your help.