With Canadian shoppers hungry for deals this holiday season, smaller retailers in Ottawa are hoping for a renewed interest in shopping locally to help them compete.
According to retail analyst Bruce Winder, this year is “all about the discount.”
“The last couple of years, it was more about the inventory shortage,” he said. “Get out there and get what you can — it’s okay to pay a higher price. Now things are turning the other direction, where there’s lots of inventory, there’s no more pandemic so you can shop around in-store, but with what’s happened with interest rates and inflation, the consumer is now looking to cut back in terms of how they spend.”
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A 2023 shopping survey from the Retail Council of Canada found that Canadians plan to spend more this holiday season compared to last year, but the majority are seeking value through sales, free shipping deals, exclusive offers, bundles and samples.
For small and locally owned businesses, that could be a problem.
“(Customers) are looking for those 40 or 50 per cent off deals, which is tough because some of the smaller local businesses won’t be able to compete with the (big box stores),” said Winder. “They don’t buy as much volume and they can’t get the same pricing as the bigger stores.”
As a result, smaller businesses are cutting costs elsewhere. According to Winder, seasonal hiring across Canada is down 30 per cent this season.
“It’s one of the only things they can do to try to make some money this fall as margins are squeezed based on the lower promotional prices that consumers are demanding,” Winder said.
Some local businesses are making other adjustments to save on costs.
Gareth Davies, owner of gift and homeware shop Maker House Co. in Hintonburg, said his store has stocked up on budget-friendly options for the gift-giving season.
“We’ve tried to bring in a lot more smaller goods in the 10- to 30-dollar range,” he said. “That can be things like jams and spreads, or chocolate gifts, or DIY craft kits. We also have a nice selection of jewelry now that we haven’t carried in previous years. And we have curated gifts that are really popular. We distill down to five to 10 makers into one gift box, so you get a good selection of different Canadian-made things bundled together.”
He added, “We’re really trying to fit that dollar range.”
According to Davies, 2023 has been a slower year for business overall, but sales traffic picked up with the early November cold snap.
“That usually gets people thinking about the holidays,” he said. “We do half of our annual sales during the last couple months of the year, so it’s pretty important for a lot of retailers. We’ve seen some promising signs with higher traffic than last November, and higher sales as well.”
To compete with larger retailers, local businesses are putting more emphasis on community involvement and the shop local experience.
Davies said he has prioritized engagement in the local community, with fundraising initiatives to mark the season. For Black Friday, customers got 10 per cent off with a donation to the Parkdale Food Centre, which the store then matched. It will be doing the same thing for Giving Tuesday this week.
“We’re putting a little local spin on it, where it’s not all about getting a door-crasher deal,” he said. “You can still save and also help us give back to really important community organizations.”
Maker House is also one of many local businesses embracing the holiday market season, setting up pop-up shops across the city through November and December.
Zach Dayler, executive director of the ByWard Market District Authority, said there’s plenty of activity happening in the Market to help shoppers embrace the holiday shopping experience that was lost during the pandemic.
“You can make a good go of it seven days a week,” he said. “The key thing for the holiday retail sector is the other spin of benefits. When somebody goes out holiday shopping, they often buy a coffee, have lunch or meet up with a friend. All those things contribute to making it a successful season.”
While businesses continue to deal with a variety of pressures, Dayler said they’re hoping to see a move back toward local after years of online shopping.
“Over the pandemic, one of the behaviours we all slipped into was ordering online from big retailers like Amazon. But we want to encourage folks to get out there again and start walking their main streets, whether that’s the ByWard district or Vanier or Wellington West,” he said.
While shoppers have tightened their purse strings, Dayler said local businesses still have a fighting chance against large retailers, even if they can’t always offer the same discounts.
“We don’t see the same type of shopping clientele that you see in the Rideau Centre,” he said. “They’re not out here looking for a deal. They want to support the business. We need to make sure we’re tracking spending behaviours and looking to find ways to support small businesses. It’s about getting out and exploring local retail.”