Having run her home decor and art business for 45 years, Pamela Haight has experienced countless ups and downs. The recent recession in Alberta counts as one of the more trying times for her store, Rubaiyat, on the southern edge of Calgary’s downtown.
The recession is over, but Haight – like many retailers – is struggling to notice a bounce back in business.
Asked to describe how stores are faring, Haight pauses and shrugs her shoulders. Her body language sums up how many small business owners in the city are feeling.
“We keep hearing that it is better, but small retailers like ourselves are experiencing the same thing – we’re not seeing huge increases [in sales],” she said.
North American oil prices have rebounded from under $30 US per barrel to above $72, unemployment in Alberta continues to fall and wages are the highest in the country. At the same time, Calgary downtown office vacancy rates are still sky high and thousands of new houses in the city sit empty without a buyer.
“It’s erratic,” said Haight. “We’re still very lucky that we have a customer base that is really loyal and makes a point of coming to us.”
Retail sales in the province are up ten per cent from the lowest point during the recent recession, in July 2016. However economists at ATB Financial point out in a recent report that in the last year, consumer price inflation has been slightly higher than consumer spending, meaning “while shoppers are spending more money, they may actually be bringing home fewer items in their carts.”
Store owners are trying to improve their fortunes by branching out from the status quo. Haight began offering online sales on the Rubaiyat web site last year. For the 69-year-old, it was an adjustment.
“Our children work with us and see the world differently than we do and that’s important,” she said.
Another strategy retailers are taking is to find a new revenue stream. Instead of just selling art and craft supplies, Mona Lisa Artists’ Materials will celebrate it’s 60th anniversary at the end of this year by opening a nearby studio to offer training and workshops.
“We get asked every single day if we teach art classes,” said Jennifer Beeger, the store’s general manager and part of the family that owns the business. The store was impacted more by the drop in the value of the loonie than the actual recession itself, but Beeger said retail in general is challenged right now.
“It’s struggling,” she said. “For us, I’m just grateful for the type of business that we are. My dad always said that hair salons and art stores always survive when there is a downturn in the economy because people stop and start doing things for themselves.”
Traditional retailers are facing increased pressure from new startups, especially those that are produced through the rise of business incubators. The startups are much better prepared to succeed and usually have a marketing flair to them.
“We have these older retailers and these are typically who I serve and they are calling me because they can’t compete with the new store that just opened up next door,” said Ash Ahern, a business coach who specializes in branding.
Previously, retailers often needed the basics of having a web site and update it on occasion, but Ahern said that’s not enough, especially in a tough economy.
“Nowadays, it’s not like that anymore,” said Ahern. “You have to be engaging people online. I think a huge portion of the population is hanging out on Facebook, they’re hanging out on Instagram, and if you don’t even have a Facebook page, it might be difficult for you to find new customers.”
Retailers have faced several headwinds in recent years beyond the obvious economic strain in the province. The minimum wage is marching upwards toward $15 per hour, business property taxes spiked in Calgary because of downtown office vacancies, and new labour rules about overtime and holiday pay were introduced.
There are many forces putting pressure on business depending on their size and industry, such as traditional brick and mortar stores losing sales to large online retailers.
“Calgarians, even though the recession is over, are still finding their footing in terms of how much they want to spend as businesses, how much they want to spend as individual households,” said Adam Legge, director at the University of Calgary’s Haskayne School of Business and a former CEO of the city’s chamber of commerce.
Legge’s general advice to business right now is the same as when the recession hit: get costs under control, look to other markets beyond Calgary, Alberta, or Canada, and think of ways to adapt your product or service to find a new industry.
“We’re still in a bit of a shaking out of the economy, and businesses are finding they just haven’t found that new normal yet,” he said.